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Organic Law on Provincial Governments and Local-level Governments 2014

Consolidation of the Organic Law on Provincial Governments and Local-level Governments

This is a consolidation of the Organic Law on Provincial Governments and Local-level Governments as in force on 1 December 2014.

The Organic Law on Provincial Governments and Local-level Governments has been amended many times since 1995 and as a result has become difficult for readers to use. Readers have to locate each of the amending laws and then read the amendments into the principal Law. There is a risk that some amendments may be missed or that a reader will misread an amendment into the principal Law.

The consolidation has been prepared to assist readers. It brings together into one document the principal Law and its various amending laws. However, the consolidation does not itself make any alterations to the principal Law (or the amending laws). The sections in the consolidation have also not been renumbered in the consolidation.

A list of the amending laws incorporated into the consolidation is set out at the end of this document. In addition, the notes at the end of the consolidation include information about the amending laws and the amendment history of each amended provision.

The Department of Provincial and Local-level Government Affairs is responsible for the preparation of this consolidation. The Office of Legislative Counsel has provided assistance in preparing it.

INDEPENDENT STATE OF PAPUA NEW GUINEA

Table of Contents

THE ORGANIC LAW ON PROVINCIAL GOVERNMENTS AND LOCAL-LEVEL GOVERNMENTS.

PREAMBLE.

We, the representatives of our People in the National Parliament, in responding to the nationwide call of our people to bring about substantive reforms to our Provincial Government system, have resolved—

(a) to make such changes as are necessary now contained in this Organic Law for the purposes of—

(i) maintaining our identity as a sovereign united nation; and

(ii) promoting equal opportunity and popular participation in government at all levels; and

(iii) providing especially the basic human needs for water, health, education, transportation, communication, accommodation and social order through economic self-reliance; and

(iv) promoting responsible citizenship through self-management, control and accountability for one's actions; and

(b) to establish Provincial Governments and Local-level Governments in order to achieve the goals referred to in Paragraph (a).

Being an Organic Law—

(a) to implement Part VIA (Provincial Governments and Local-level Governments) of the Constitution by making provision for and in respect of a system of Provincial Governments and Local-level Governments for the provinces pursuant to the Second National Goal (Equality and Participation) of the National Goals and Directive Principles of the Constitution; and

(b) to repeal and replace the Organic Law on Provincial Government,

and for related purposes,

MADE by the National Parliament, to come into operation—

(a) in so far as relating to all provinces other than Bougainville Province and the National Capital District—on certification; and
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(b) in so far as relating to Bougainville Province—on 1 January 1999; and
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(c) in so far as relating to the National Capital District—in accordance with a notice published in the National Gazette by the Head of State, acting with, and in accordance with, the advice of the Minister.

PART I.—PRELIMINARY.

Division 1.—General Principles of Provincial Governments and Local-level Governments.

1. General Principles.

(1) Subject to the Constitution, in exercising any power vested by this Organic Law or by any other law, all Provincial Governments and Local-level Governments shall observe the general principles stated in this Division.

(2) Subject to the Constitution, each Provincial Government and Local-level Government or its agent, or public authority or its agent shall, in carrying out its functions, duties and responsibilities, comply with—

(a) the principle of—
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(i) mainly elective (elected directly or indirectly) representative and participatory government; and

(ii) appointment on merit to all public offices; and

(iii) efficient and effective government; and

(iv) ensuring the proper use and care of all public properties; and

(v) accountability in the use of public finances, properties and as public power; and

(vi) human rights as recognised and enforced by Papua New Guinea law; and

(vii) treating all persons as human beings of equal worth and dignity; and

(viii) acting honestly and fairly and upholding respect for, and dignity of, government; and

(b) the Fourth National Goal (Natural Resources and Environment) of the National Goals and Directive Principles of the Constitution.

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(3) Each Provincial Government and Local-level Government shall receive sufficient funding to deliver similar levels of goods and services in accordance with the principles that―

(a) every effort shall be made to achieve an equitable distribution of incomes and other benefits of development among individuals and throughout the various parts of the country, pursuant to the Second National Goal (Equality and Participation) of the National Goals and Directive Principles of the Constitution; and

(b) wise use shall be made of our natural resources and the environment in and on the land or seabed, in the sea, under the land, and in the air, in the interests of our development and in trust for future generations, pursuant to the Fourth National Goal (Natural Resources and Environment) of the National Goals and Directive Principles of the Constitution.

(4) In principle, the elected leaders are responsible for the formulation of policies and the officers are responsible for the implementation of those policies, and in any case the two shall work together for the benefit of the people.

(5) The wealth generated by lawful exploitation of any natural resources must be equitably distributed by the National Government, the Provincial Governments and Local-level Governments for the benefit of resource owners and all levels of governments.

(6) All levels of government and governmental bodies shall recognise traditional land rights and other rights and shall ensure that adequate compensation is made for the loss of such rights.

(7) The general principles in this section are non-justiciable but may be used in the interpretation and implementation of this Organic Law.

Division 2.—Compliance with Constitutional Requirements, Interpretation and Application.

2. Compliance with Constitutional Requirements.

This Organic Law, to the extent that it regulates or restricts a right or freedom referred to in Subdivision III.3.C (qualified rights) of the Constitution, namely—

(a) the right to freedom from arbitrary search and entry conferred by Section 44 of the Constitution; and

(b) the right to privacy conferred by Section 49 of the Constitution; and

is a law that is made for the purpose of giving effect to the public interest in public order and public welfare.

3. Interpretation.

(1) In this Organic Law, unless the contrary intention appears—
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"assigned service delivery function or responsibility" means a service delivery function or responsibility assigned or reassigned by or under an Act of the Parliament in accordance with Section 43 or 45 to—

(a) a Provincial Government or a class of Provincial Governments; or

(b) a Local-level Government or a class of Local-level Governments; or

"Chairman" means the Chairman of a Provincial Assembly in accordance with Section 14;

"Deputy Provincial Governor" means a Deputy Provincial Governor of a province elected in accordance with Section 18;

"district administrative headquarters" means a district administrative headquarters established under Section 72;

"District Administrator" means a District Administrator appointed under Section 73;

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"District Development Authority" means a District Development Authority established by Section 33A;

"Electoral Development Authority" means an Electoral Development Authority established under the Electoral Development Authority Act 1992;

"Interim Chairman" means the person holding the office of Chairman of an Interim Provincial Government in accordance with Section 125(3) or (4);
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"Interim Deputy Chairman" means the person holding the office of Deputy Chairman of an Interim Provincial Government in accordance with Section 125(5) or (5A);
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"Interim Deputy Governor" means the person holding the office of Interim Deputy Governor of a province in accordance with Section 125(5) or (5A);

"Interim Provincial Assembly" means an Interim Provincial Assembly of a province in accordance with Section 123;

"Interim Provincial Executive Council" means an Interim Provincial Executive Council of a Province in accordance with Section 123(2);

"Interim Provincial Government" means an Interim Provincial Government of a province established by Section 123(1);

"Interim Provincial Governor" means the person holding office as Interim Provincial Governor under Section 125(3) or (4);

"Local-level Government" means a Local-level Government established in accordance with Section 26 and 27;

"Local-level law" means a law made by a Local-level Government in accordance with this Organic Law;

"Mediation and Arbitration Tribunal" means the Mediation and Arbitration Tribunal established under Section 118;

"National Economic and Fiscal Commission" means the National Economic and Fiscal Commission established by Section 117;

"National Investigation Committee" means the National Investigation Committee established by Section 61;

"Provincial Administrative Headquarters" means a Provincial Administrative Headquarters established by Section 72;

"Provincial Administrator" means a Provincial Administrator appointed under Section 73(2);

"Provincial Assembly" means a Provincial Assembly established by Section 10;

"Provincial Audit Service" means a Provincial Audit Service established under Section 113(1);

"Provincial Auditor" means a Provincial Auditor appointed under Section 113(2);

"Provincial and District Treasury" means a Provincial and District Treasury established by Section 112;

"Provincial Executive Council" means a Provincial Executive Council established under Section 23;

"Provincial Government" means a Provincial Government established under Section 10;

"Provincial Governor" means the person holding office as Provincial Governor in accordance with Section 17 or 21;

"provincial law" means a law made or adopted by a Provincial Government in accordance with this Organic Law;
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"Provincial and Local-level Service Monitoring Authority" means the Provincial and Local-level Service Monitoring Authority established by Section 110;

"Special Investigating Committee" means a Special Investigating Committee appointed under Section 51(1)(b);

"service delivery entity" means an entity to which a service delivery function or responsibility is assigned or reassigned by or under an Act of the Parliament in accordance with Section 43 or 45;
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"urban Local-level Government" means a Local-level Government for an area declared as an urban area under the Local-level Governments Administration Act 1997.

(2) Unless the context otherwise requires, a reference in this Organic Law—

(a) in relation to a province or to a Provincial Government, to a provincial body or provincial office referred to in Subsection (1), is a reference to the provincial body or provincial office established or appointed for or in relation to that province or Provincial Government; and

(b) in relation to a district or to a Local-level Government, to a provincial or local-level body or provincial or local-level office referred to in Subsection (1), is a reference to the provincial or local-level body or provincial or local-level office established or appointed for or in relation to that district or Local-level Government.

4. Application.

(1) The system of Provincial Governments established by this Organic Law applies to the government of the National Capital District and the provisions of this Organic Law relating to Provincial Governments apply to the National Capital District.

(2) For the period on and from the date of coming into operation of this Organic Law until the date fixed for the return of the writs following the next general election held after the date of coming into operation—

(a) the system of Interim Provincial Governments provided for in Subdivision VI.3.C shall apply; and

(b) the provisions of the remainder of this Organic Law shall apply only to the extent necessary to enable the operation of the Interim Provincial Governments in accordance with Subdivision VI.3.C.

(3) The provisions of Subsection (2) do not apply in relation to Bougainville Province and the National Capital District.

Division 3.—System of Provincial Governments and Local-level Governments.

5. System of Provincial Governments and Local-level Governments.

(1) A system of Provincial Governments and Local-level Governments is hereby established.
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(2) Subject to the Constitution, the system of Provincial Governments and Local-level Governments established by Subsection (1), shall be implemented in accordance with this Organic Law and an Act of the Parliament.

Division 4.—Legal Status of Provincial Governments and Local-level Governments.
Subdivision A.—Legal Capacity of Provincial Governments and Local-level Governments.

6. Legal capacity.

A Provincial Government or a Local-level Government—

(a) may acquire, hold and dispose of property of any kind; and

(b) may sue and be sued,

and a provincial law or a local-level law may make provision for and in respect of the manner and form in which each respective government may do so.

7. Service of process.

Any notice, summons, writ or other process required to be served on a Provincial Government or a Local-level Government may be served on an officer designated by the Provincial Government or the Local-level Government for that purpose.

Subdivision B.—Recognition of Provincial Government and Local-level Government laws, Public Acts, etc.

8. Recognition of Provincial Government and Local-level Government laws, judicial notice, etc.

Full faith and credit shall be given throughout Papua New Guinea to the laws, the public acts, records and proceedings of all Provincial Governments and Local-level Governments.

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9. Provincial Government and Local-level Government symbols and seat of government.

(1) Subject to Subsection (3), a provincial law may make provision for and in respect of—

(a) the seat of government; and

(b) a Provincial Government flag; and

(d) a Provincial Government motto; and

(e) a Provincial Government seal,

for the Province.

(2) Subject to Subsection (3), a local-level law may make provision for and in respect of—

(a) the seat of Government; and

(b) a Local-level Government flag; and

(d) a Local-level Government motto; and

(e) a Local-level Government seal,

for the area to which the local-level law applies.

(3) The Minister may, where he considers it is in the national interest so to do, disallow any Provincial or Local-level Government flag, emblem or motto.

PART II.—INSTITUTIONAL STRUCTURE OF LEGISLATIVE AND EXECUTIVE ARMS OF PROVINCIAL GOVERNMENTS AND LOCAL-LEVEL GOVERNMENTS.

Division 1.—Institutional Structure of Legislative and Executive Arms of Provincial Governments.
Subdivision A.—Legislative Arm of Provincial Governments.

10. Provincial Government and Provincial Legislature.

(1) A Provincial Government is hereby established for each province.

(2) A provincial legislature, to be known as the Provincial Assembly or by whatever local name is considered appropriate, is hereby established for each Provincial Government.

(3) A Provincial Assembly shall consist of—

(a) all Members of the Parliament representing electorates in the province; and

^[13] (b) [Repealed]

^[14] (c) [Repealed]

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(d) subject to Subsection (6), where the chieftaincy system is in existence and is accepted in a province, paramount chiefs from the province—

(i) not exceeding three in number; or

(ii) where the Minister responsible for provincial government and local-level government matters considers that particular circumstances justify it, not exceeding four in number,

or their duly appointed nominees, who shall be appointed by the Minister responsible for provincial government and local-level government matters on the recommendation of the Provincial Executive Council; and
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(e) one woman representative nominated in accordance with an Act of the Parliament and appointed by the Provincial Executive Council; and

(f) such other members, not exceeding three in number, as the Provincial Assembly may appoint from time to time.

(4) An Act of the Parliament shall make provision for the qualifications and disqualifications of the members referred to in Subsection (3)(f).
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(5) All members of a Provincial Assembly have full voting powers and shall be counted towards the quorum of a Provincial Assembly.

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(6) Where there are more than one paramount chiefs in a district only one may be recommended for appointment.

11. Roles of Members of Parliament.

An Act of the Parliament may make provision for and in relation to the roles and functions of the members referred in Section 10(3)(a).

12. Qualifications and disqualifications of elected members.

(1) Subject to this section, the qualifications and disqualifications of the members of a Provincial Assembly referred to in Section 10(3)(a) shall be as those prescribed by law relating to Members of the National Parliament.

(2) If a member referred to in Section 10(3)(a)—

(a) is disqualified or ceases to be a Member of the Parliament; or

(b) is absent, without leave of the Provincial Assembly, during three consecutive meetings of the Assembly, unless the Assembly waives this provision upon satisfactory reasons being given,

the member shall cease to be a member of the Provincial Assembly.

13. Vacation of office.

(1) This section applies only to the members of a Provincial Assembly referred to in Section 10(3)(d), (e) and (f).

(2) Unless earlier terminated under Subsection (3), the office of a member of the Assembly to whom this section applies becomes vacant on the day the writ is returned following a general election.

(3) Where a member of the Assembly to whom this section applies—

(a) dies or resigns his office; or
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(b) becomes permanently incapable of performing his duties as certified by two medical practitioners appointed for the purpose by the National Authority responsible for the registration or licensing of medical practitioners; or

(d) becomes of unsound mind within the meaning of any law relating to the protection of persons and property of persons of unsound mind; or

(e) is absent without leave of the Provincial Assembly, during the whole of three consecutive meetings of the Assembly, unless the Assembly decides to waive this provision upon satisfactory reasons being given; or

(f) becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his creditors, or makes an assignment of his remunerations for their benefit; or

(g) is convicted of a criminal offence punishable by law for which a term of imprisonment of not less than six months or death are prescribed as a penalty and, as the result of that conviction, is sentenced to imprisonment or is under sentence of death, or is under bond to appear for sentence if called on; or

(h) is dismissed from office for misconduct in office,

the member is deemed to have vacated his office, and the Head of State, acting with and in accordance with, the advice of the National Executive Council, shall terminate his membership.

(4) Where the office of a member of the Assembly becomes vacant under Subsection (3), the vacancy shall be filled as soon as practicable.

(5) The exercise or performance of a power or function of the Assembly is not invalidated by reason only of a vacancy in the membership of the Assembly.

14. Chairman of Provincial Assembly.

(1) There shall be a Chairman of a Provincial Assembly.

(2) Subject to this Organic Law, the Provincial Governor is the Chairman of the Provincial Assembly.

(3) If the Provincial Governor is—

(a) on leave of absence; or

(b) absent from the province; or

(d) otherwise unable to perform, or is not readily available to perform the duties of his office,

the Deputy Governor shall perform the functions and responsibilities of the Governor as Chairman of the Provincial Assembly.

15. Procedures of Provincial Assembly.

(1) The Provincial Governor shall preside at all meetings of the Provincial Assembly at which he is present.
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(2) Subject to this Organic Law, the privileges and immunities of members of Provincial Assemblies and the procedures and proceedings, including the number of meetings and quorum for meetings of Provincial Assemblies shall be as determined by an Act of the Parliament.

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(3) The number of meetings of a Provincial Assembly shall be not less than four in each calendar year and shall not be held at the same time as the meetings of the National Parliament.

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16. Remuneration and allowance.

The salaries, allowances and other terms and conditions of the Provincial Governor, Deputy Provincial Governor, the Chairman and Deputy Chairman of a committee of the Provincial Assembly or the Provincial Executive Council and the other members of the Assembly, shall be as determined by the Salaries and Remuneration Commission.

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16A. Provincial Assembly Committees.

(1) A Provincial Assembly may, in accordance with an Act of the Parliament—

(a) establish such number of committees (including permanent committees) as the Assembly considers necessary to carry out its functions; and

(b) determine all matters relating to such committees.

(2) The committees of the Assembly shall consist only of members of the Assembly.

Subdivision B.—Executive Arm of Provincial Governments.

17. The Provincial Governor.

(1) An office of a Provincial Governor in each province is hereby established.

(2) Subject to this Organic Law, the Member of the National Parliament representing the provincial electorate shall be the Provincial Governor.

18. The Deputy Provincial Governor.

(1) An office of Deputy Provincial Governor in each province is hereby established.

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(2) The Deputy Provincial Governor shall be elected by the Provincial Assembly from amongst the members referred to in Section 10(3)(a).

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(3) If the Deputy Provincial Governor—

(a) is dismissed from office in accordance with Section 20; or

(b) is appointed—

(i) a Minister or a Vice-Minister in the National Government; or

(ii) the Speaker or Deputy Speaker of the Parliament; or

(iii) the Leader or Deputy Leader of the Opposition in the Parliament; or

(iv) the Chairman of the Permanent Parliamentary Public Works Committee; or

(v) the Chairman of the Permanent Parliamentary Public Accounts Committee; or

(vi) to an office which has powers and privileges equivalent to those of a Minister; or

(c) resigns his office by written notice to the Minister responsible for provincial government and local-level government matters; or

(d) is, in the opinion of two medical practitioners appointed for the purpose by the National Authority responsible for the registration or licensing of medical practitioners, unfit, by reasons of physical or mental incapacity, to carry out the duties of his office; or

(e) is otherwise disqualified by law or ceases to be a member of the Provincial Assembly or of the National Parliament,

he shall be deemed to have vacated the office of the Deputy Provincial Governor.

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(4) If the Deputy Provincial Governor vacates his office in accordance with Subsection (3), the Provincial Assembly shall elect the Deputy Provincial Governor in accordance with Subsection (2).

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(5) Where the Deputy Provincial Governor vacates his office in accordance with Subsection (3)(a),(b),(c) or (d), he shall continue to hold office as a member of the Assembly, and is eligible to be re-elected as the Deputy Provincial Governor.

19. Vacation of office of the Provincial Governor.

(1) If the Provincial Governor—

(a) is dismissed from office in accordance with Section 20; or

(b) is appointed—

(i) a Minister or a Vice-Minister in the National Government; or

(ii) the Speaker or Deputy Speaker of the Parliament; or

(iii) the Leader or Deputy Leader of the Opposition in the Parliament; or

(iv) the Chairman of the Permanent Parliamentary Public Works Committee; or

(v) the Chairman of the Permanent Parliamentary Public Accounts Committee; or

(vi) to an office which has powers and privileges equivalent to those of a Minister; or
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(c) resigns his office by written notice to the Minister responsible for provincial government and local-level government matters; or

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(d) is, in the opinion of two medical practitioners appointed for the purpose by the National Authority responsible for the registration or licensing of medical practitioners, unfit, by reason of physical or mental incapacity, to carry out the duties of his office; or

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(e) is otherwise disqualified by law or ceases to be a member of the Provincial Assembly or of the National Parliament,

he shall be deemed to have vacated the office of the Governor.
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(2) Where the Provincial Governor is a Member of the National Parliament, other than the Member of the Parliament representing the province, he shall be deemed to have vacated the office of the Governor, if he—

(a) is dismissed from office in accordance with Section 20; or

(b) resigns his office in accordance with Subsection 1(c); or

(c) is, in the opinion of two medical practitioners appointed for the purpose by the National Authority responsible for the registration or licensing of medical practitioners, unfit, by reason of physical or mental incapacity, to carry out the duties of his office; or

(d) is appointed to any of the offices referred to in Subsection (1)(b); or

(e) is otherwise disqualified by law or ceases to be a member of the Provincial Assembly or of the National Parliament.

(3) Where the Provincial Governor vacates his office in accordance with Subsection (1)(b) or (c), or Subsection (2)(a), (b), (c) or (d), he shall continue to hold office as a member of the Assembly, and is eligible to be re-appointed as, but does not automatically become, the Provincial Governor during the balance of his term of office in the Assembly.

(4) Notwithstanding Subsections (1) and (2), the Provincial Governor shall continue in office until the election of the next Provincial Governor.

(5) For the purposes of Subsection (1)(b)(vi), the National Executive Council may determine whether an office is an office to which that subparagraph applies.

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20. Dismissal of Provincial Governor and Deputy Provincial Governor.

(1) Subject to this section, if the Provincial Governor or Deputy Provincial Governor—

(a) deliberately and persistently frustrates or fails to comply with the resolutions of the Provincial Assembly; or

(b) deliberately and persistently disobeys applicable laws, including the Constitution, an Organic Law (including this Organic Law) or any national legislation applying in the province; or

(d) does an act that is or is likely to bring into disrepute or call into question the integrity of his office,

the Provincial Assembly may, by a two-thirds absolute majority vote, dismiss the Provincial Governor or Deputy Provincial Governor.

(2) The dismissal of the Provincial Governor or the Deputy Provincial Governor shall be by motion—

(a) which shall be expressed to be a motion to dismiss the Provincial Governor or the Deputy Provincial Governor, as the case may be; and

(b) of which not less than one week's notice signed by the number of members of the Provincial Assembly, being not less than one-quarter of the total number of seats in the Assembly, has been given in accordance with the procedures of the Assembly.

21. Election of the Provincial Governor in the event of vacancy.

(1) Subject to Subsection (3), if the Provincial Governor vacates his office in accordance with Section 19(1), or is dismissed from office in accordance with Section 20, the Provincial Assembly shall, from amongst the members of the Assembly who are Members of the Parliament, elect the Provincial Governor.

(2) Subject to Subsection (3), if the Provincial Governor elected under Subsection (1) vacates his office in accordance with Section 19(2), or is dismissed from office in accordance with Section 20, the Assembly shall elect another Member of the Parliament to be the Provincial Governor.

(3) If—

(a) a vacancy exists in the office the Provincial Governor; and
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(b) all of the Members of the Parliament—

(i) are appointed to any of the offices referred to in Section 19(1)(b); or

(ii) are otherwise disqualified by law,

the Assembly shall, from amongst the members referred to in Section 10(3)(b) and (c), elect the Provincial Governor.
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22. Political and executive responsibilities of the Provincial Governor and the Deputy Provincial Governor.

(1) The Provincial Governor, or in his absence the Deputy Provincial Governor, shall—

(a) be politically responsible to the Provincial Assembly for the overall development and good government of the province; and

(b) be constitutionally responsible to the Minister responsible for provincial government and local-level government matters.

(2) Subsection (1) does not affect the exercise, by a Member of the Parliament, of his functions, powers, duties and responsibilities as a Member of the Parliament.

23. Provincial Executive Council.

(1) There shall be an executive arm of a Provincial Government to be known as the Provincial Executive Council.

(2) The Provincial Executive Council shall consist of—

(a) the Provincial Governor and the Deputy Provincial Governor; and
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(b) the Chairman of each of the permanent committees of the Provincial Executive Council appointed by the Governor.
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(3) The Provincial Governor shall be the Chairman of the Provincial Executive Council and in his absence the Deputy Provincial Governor shall act as the Chairman.
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(4) The total membership of the Provincial Executive Council shall be five or one third (whichever is greater) of the total membership of the Provincial Assembly.

(5) The principal function of a Provincial Executive Council shall be to implement the laws and policies made or adopted by the Provincial Assembly and to implement the laws and policies of the National Government applying to the province.

24. Procedures of Provincial Executive Council.

The procedures of a Provincial Executive Council shall be as determined by the Provincial Executive Council.
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25. Provincial Executive Council Committees.

(1) A Provincial Executive Council shall, in accordance with an Act of the Parliament—

(a) establish a Joint Provincial Planning and Budget Priorities Committee; and

(b) establish such number of committees (including permanent committees) as it considers necessary to carry out its functions; and

(2) The Joint Provincial Planning and Budget Priorities Committee shall consist of—

(a) a member of the Provincial Executive Council appointed by the Governor, who shall be the Chairman; and

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(b) the Chairman (or his nominee) of each District Development Authority; and

(3) The Joint Provincial Planning and Budget Priorities Committee shall have the following functions—

(a) to oversee, co-ordinate and make recommendations as to the overall planning in the province, including budget priorities, for consideration by the National Government;

(b) to determine and control budget allocation priorities for the Province;

(d) to draw up a rolling five-year development plan and annual estimates for the province;

(e) to conduct annual reviews of the rolling five-year development plan.

(4) The Provincial Administrator shall be the Chief Executive Officer of the Committee.

(5) A Member of the Parliament who occupies an office referred to in Section 19(1)(b) is not eligible to be a member of a Committee under this section.

(6) The Governor shall appoint a Chairman for each Committee under this section, but such appointments shall be made so as to ensure fair representation of the various electorates and districts within the province.

(7) An Act of the Parliament shall make provision for other functions and powers of, and administrative arrangements for, the Committee.

Division 2.—Institutional Structure of Legislative and Executive Arms of Local-level Governments.
Subdivision A.—Form of Local-level Governments.

26. Local-level Governments.

(1) Subject to the Constitution and to this Organic Law, an Act of the Parliament shall make provision for a system of Local-level Governments for rural and urban communities.

(2) A Local-level Government shall in principle be an elective government whose role shall be to make laws for the purpose of governing the local community.
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(3) A Local-level Government may be—

(a) an urban Local-level Government; or

(b) a rural Local-level Government; or

(d) in such other form as is approved by the National Executive Council; or

(e) a combination of one or more of the forms specified in Paragraphs (a) to (d) inclusive.

(4) The number of rural Local-level Governments in each open electorate shall not exceed three, but where special circumstances exist to justify the establishment of additional Local-level Governments, the Minister responsible for provincial government and local-level government matters may make a recommendation to this effect to the National Executive Council, and the National Executive Council may authorize such additional Local-level Government or additional Local-level Governments as it considers necessary.
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(5) The number of urban Local-level Governments shall not exceed one in each district but where special circumstances exist to justify the establishment of additional urban Local-level Governments, the Minister responsible for provincial government and local-level government matters may make a recommendation to this effect to the National Executive Council and the National Executive Council may authorize such additional Local-level Government or additional Local-level Governments, as it considers necessary.

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(6) An Act of the Parliament shall make provision in respect of any transitional arrangements necessary in relation to the transition from the system of local-level governments which are replaced by Local-level Governments under this Organic Law.

27. Establishment of Local-level Governments.

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(1) For the purposes of Section 26(3), (4) and (5), and subject to this section and to this Organic Law, the Head of State, acting on the advice of the National Executive Council, may, by proclamation, establish a Local-level Government in and for the area described in the proclamation.
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(1A) In principle, an area in respect of which a Local-level Government will apply will be contained within one open electorate, but an area may extend beyond one or more electoral boundaries where the Head of State, acting on the advice of the National Executive Council, given after considering a recommendation by the Minister, is of the opinion that such an extension is—

(a) in the interests of administrative convenience due to remoteness or geographic location; and

(b) to the benefit of the people in the area.

(2) A proclamation under Subsection (1) shall only be made after the procedure as specified in this section has been complied with.

(3) Where a Provincial Assembly is of the opinion that a Local-level Government should be established in and for an area in the province, it shall so recommend to the Minister responsible for local-level government matters.
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(4) A recommendation under Subsection (3) shall contain particulars of—

(a) the area in respect of which the Local-level Government will apply; and

(b) where the area extends beyond one or more open electorate boundaries, the reasons for the recommendation of the area; and

(d) such other particulars as are considered relevant.

(5) Where the Minister—

(a) accepts the recommendations made under Subsection (3), he shall bring the recommendations to the National Executive Council as soon as is practicable for consideration as to whether or not a proclamation be made under Subsection (1); or

(b) does not accept the recommendations made under Subsection (3) or wishes further information, he shall, as soon as practicable, consult with the Provincial Executive Council.

(6) The Minister shall, within 90 days of his consulting with the Provincial Executive Council under Subsection (5)(b), whether or not he accepts the recommendations made under Subsection (3), bring the recommendations to the National Executive Council for consideration as to whether or not a proclamation be made under Subsection (1).
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(7) If the Minister fails to bring the recommendations to the National Executive Council for consideration within the 90 days required under Subsection (6), the National Executive Council shall proceed with the recommendations as if they had been accepted by the Minister.

28. Abolition of Local-level Governments.

Subject to the Constitution, a Local-level Government shall not be abolished or in any way amalgamated and its area shall not be altered, without the prior consent of the National Executive Council and of the Provincial Assembly.

Subdivision B.—Legislative Arm of Local-level Governments.

29. Composition of Local-level Governments.

(1) Subject to this Organic Law, the members of the legislative arm of a Local-level Government shall consist of—
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(a) the head of the Local-level Government who shall be elected in accordance with an Organic Law or an Act of the Parliament; and
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(b) such number of local members, representing local wards, elected in accordance with an Organic Law or Act of the Parliament; and
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(i) one shall be a representative of workers' organisations nominated by the Papua New Guinea Trade Union Congress; and

(ii) one shall be a representative of employers' organisations nominated by the Employers Federation; and

(iii) one shall be a representative of womens' organisations nominated in accordance with an Act of the Parliament,

appointed by the Local-level Government; and

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(d) in the case of a Local-level Government in a rural area, two members who shall be representatives of women's organisations nominated in accordance with an Act of the Parliament appointed by the Local-level Government.

(2) The appointed members shall have full voting power and shall be counted towards the quorum during meetings of the Local-level Government.

30. Vacation of office.

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(1) Where a member of a Local-level Government—

(a) is disqualified under Section 31; or

(b) becomes permanently incapable of performing his duties; or

(d) fails to comply with the provisions of this Organic Law; or

(e) becomes of unsound mind; or

(f) becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with creditors, or makes an assignment of his remuneration for their benefit; or

(g) is convicted of a criminal offence punishable by law for which a term of imprisonment of not less than three months or death are prescribed as a penalty and as the result of that conviction is sentenced to imprisonment or is under sentence of death, or is under bond to appear for sentence if called on; or

(h) is dismissed from office for misconduct in office; or

(i) is dismissed from office for neglect of duty in accordance with an Act of the Parliament; or

(j) is absent without leave of the Local-level Government during the whole of three consecutive meetings of the Local-level Government, unless the Local-level Government decides to waive this provision upon satisfactory reasons being given,

the member is deemed to have vacated his office and the Minister, acting with, and in accordance with, the advice of the Provincial Executive Council, shall terminate his membership.

(2) Where an office of member of a Local-level Government is vacated in accordance with Subsection (1), the vacancy shall be filled as soon as practicable.

(3) The exercise or performance of a power or function of or by a Local-level Government is not invalidated by reason only of a vacancy in the membership of the Government.

31. Qualifications and disqualifications.

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An Act of the Parliament shall determine the qualifications and disqualifications of the members of Local-level Governments.
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32. Procedures of Local-level Governments.

(1) The head of a Local-level Government shall preside at all meetings of the Local-level Government at which he is present.

(2) Subject to this Organic Law, the privileges and immunities of members of Local-level Governments, including the number of meetings and quorums for meetings of Local-level Governments, shall be as determined by an Act of the Parliament, but the number of meetings of a Local-level Government shall be not less than four in each calendar year, and the procedures shall be consistent with the procedures of a Provincial Assembly.

33. System of Committees.

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In addition to the Joint District Planning and Budget Priorities Committee established in and for each District by Section 33A, a Local-level Government may, in accordance with an Act of the Parliament, establish such number of Local-level Government committees (including permanent committees) as it considers necessary to carry out its functions and determine all matters in relation to such committees.
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33A. District Development Authorities.

(1) A District Development Authority is established in each District.

(2) An Act of the Parliament shall make provision for the functions and powers of, and other matters relating to, District Development Authorities.
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34. Duration of office.

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(1) Wherever practicable, the term of a Local-level Government shall be the same as and run concurrently with the term of the Parliament, but in order to ensure the effective conduct of respective elections, this may be varied, provided that the date for the return of writs in a general election to Local-level Governments is fixed for a date not later than three months after the date fixed for the return of the writs of the general election to the Parliament.

(2) Unless sooner ended by resignation, disqualification or death, the term of office—

(a) in the case of an elected member, begins on the day immediately following the day fixed for the return of the writ for the election and expires on the day fixed for the return of the writ for the election after he last became a member of the Local-level Government; and

(b) in the case of an appointed member, begins on the day he is appointed and expires on the day the term of office of elected members expires in accordance with Paragraph (a).

(3) Where the Parliament is dissolved and a general election is held in accordance with Section 105(1)(b) or (c) (general elections) of the Constitution, the term of the Local-level Governments shall be deemed to have expired, but the members shall continue in office until the day fixed for the return of the writs for the general election for the Local-level Governments.
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35. Remuneration and allowances.

The salaries, allowances and other terms and conditions of the members of Local-level Governments shall be as are determined by the Salaries and Remuneration Commission.

Subdivision C.—Executive Arm of Local-level Governments.

36. Local-level Government executive arm.

(1) The executive arm of a Local-level Government shall consist of all the members of the legislative arm of the Local-level Government.

(2) An Act of the Parliament shall make provision for the powers and procedures of the executive arm of a Local-level Government.

Division 3.—Local-level Government Electoral System.

37. Local-level Government elections.

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Elections for the Local-level Governments shall be conducted by the Electoral Commission in accordance with an Organic Law or an Act of the Parliament.

38. Eligibility of candidates.

(1) A person shall not stand for election to a Local-level Government unless he is a citizen who—

(a) was born in the Local-level Government area in which he intends to stand; or

(b) has lived in the Local-level Government area in which he intends to stand for a period of not less than two years continuously prior to the date of his nomination to stand for election; or

(c) is a descendant of a parent who was born in the Local-level Government area and is able to speak at least one of the indigenous languages of the Local-level Government area and any one of the following languages, namely—

(i) English; or

(ii) Tok Pisin; or

(iii) Hiri Motu.

(2) A person is not eligible to contest an election if he is—

(a) an undischarged bankrupt or insolvent; or

(b) insane; or

(d) convicted of an indictable criminal offence; or

(e) dismissed from office in accordance with Division III.2 (Leadership Code) of the Constitution for misconduct in office.

39. Death of Member not to disrupt elections.

An election under Section 37 does not fail because of the death of a candidate after his nomination and before the end of the polling period.

PART III.—LAW MAKING POWERS OF NATIONAL PARLIAMENT, PROVINCIAL GOVERNMENTS AND LOCAL-LEVEL GOVERNMENTS.
Division 1.—General Division of Powers.

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40. Principles of division of law-making powers.

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(1) The division of law-making powers between the National Government, Provincial Governments and the Local-level Governments shall be based on the following principles—
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(a) the National Government, Provincial Governments and Local-level Governments shall respectively have specific powers;

(b) the powers that are not so specified shall be assumed to remain with the National Government;

(c) where for any reason, a level of government cannot exercise any of its powers effectively then such powers may be delegated to either of the other levels of governments to exercise on behalf of the first government;

(d) both Provincial Government and Local-level Government powers are subject to the National Law but only to the extent that the national interest so requires, otherwise they shall have relative autonomy to operate;

(e) powers of Local-level Governments are subject to the powers of Provincial Governments but only to the extent that the provincial interest requires them to be made subject to the provincial laws.

(2) The general principles in this section are non-justiciable but may be used in the interpretation and implementation of this Organic Law.

Division 2.—Powers of National Government.

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41. Law-making powers of the National Parliament, etc.

(1) A law-making power that is not specified in Section 42 or 44 remains with the National Parliament.

(2) Subject to this section, the National Parliament may make an Act of the Parliament on a matter specified in Section 42 or 44 only where the matter is of national interest.

(3) Subject to Subsection (4), the National Parliament shall not make an Act to which Subsection (2) applies unless there has been consultation between the Minister responsible for provincial government and local-level government matters, and the Provincial Government or the Local-level Government concerned.

(4) Subsection (3) does not apply in respect of—

(a) emergency laws within the meaning of Section 226 (definition for the purposes of Part X) of the Constitution; or

(b) any Act of the Parliament dealing with a matter of urgent national importance when it is in the national interest that the Act be made without delay.

(5) In a case to which Subsection (4)(b) applies, the Minister responsible for provincial government and local-level government matters shall, as soon as practicable, advise any Provincial Government or Local-level Government concerned of the Act and of the reason for urgency.

(6) An Act of the Parliament on a matter specified in Section 42 or 44 shall prevail over any law made under Section 42 or 44, whether such law is made before or after the date of the making of the Act of the Parliament, to the extent of any inconsistency with the Act of the Parliament.

(7) A question—

(a) whether an Act of the Parliament complies with Subsection (2); or

(b) whether the provisions of this section have otherwise been complied with,

is non-justiciable.

Division 3.—Powers and Functions of Provincial Legislatures.
Subdivision A.—Law-Making Powers.

42. Law-making powers of the Provincial Legislatures.

(1) Subject to the Constitution and this Organic Law, a provincial legislature may make laws on the following matters—

(a) mobile trading;

(b) primary, secondary, technical and vocational education, but not curriculum;

(d) public entertainment;

(e) culture and cultural centres;

(f) museums and libraries;

(g) sport and recreation;

(h) tourism;

(i) village and urban or community courts (but not jurisdiction);

(j) community, urban and rural development;

(k) agriculture;

(l) fishing and fisheries;

(m) trade and industry within the province;

(n) rural health;

(o) gambling, lotteries and other games of chance;

(p) transportation and facilities;

(q) town and urban planning;

(r) land and land development, including provincial titles and leases provided that the terms of such titles and leases shall not exceed the terms of titles and leases which may be granted by or under National laws;

(s) forestry and agro forestry;

(t) renewable and non-renewable natural resources (but not maximum or minimum volume, or quantities, export prices, tax measures or taxation, levies or dues to be levied);

(u) mediation and arbitration (but not jurisdiction), but not in respect of disputes referred to in Section 118(2);

(v) commissions of inquiry;

(w) traditional currencies;

(x) family law, marriage, adoption and maintenance but not bride or groom wealth;

(y) parks, reserves, gardens, scenic and scientific centres;

(z) registration of vehicles;

(aa) provincial housing (but not State-owned housing).
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(2) Subsection (1)(l), (s) and (t) do not apply to large-scale mining, petroleum, forestry, fishing and marine resource ventures declared by the Head of State, acting on advice, to be ventures to which this subsection refers.
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(3) A law made under Subsection (1) shall have effect so far as it is not inconsistent with an Act of the Parliament made—

(a) before the coming into operation of this Organic Law; or

(b) in accordance with Section 41.
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(4) For the purposes of Subsection (2), a question—

(a) whether or not a law made under Subsection (1) is a law with respect to a matter specified in that subsection; or

(b) whether or not a law made under Subsection (1) is inconsistent with an Act of the Parliament,

is non-justiciable except at the instance of the National Government or of a Provincial Government.

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Subdivision B. ― Administrative Functions, and Service Delivery Functions and Responsibilities of Provincial Governments.

43. Principal administrative functions, and service delivery functions and responsibilities.

(1) Subject to the Constitution and this Organic Law, an Act of the Parliament shall provide for—

(a) the principal administrative functions of Provincial Governments; and

(b) the assigned service delivery functions and responsibilities of Provincial Governments.

(2) An Act of the Parliament may provide for all or any of the following—

(a) the determination of, or the means of determining, the service delivery functions and responsibilities of Provincial Governments;

(b) the assignment of, or the means of assigning, service delivery functions and responsibilities to—

(i) a Provincial Government or a class of Provincial Governments; or

(ii) a person or body, or a class of persons or bodies;

(i) a Provincial Government or a class of Provincial Governments; or

(ii) a person or body, or a class of persons or bodies;

(d) the reassignment of, or the means of reassigning, service delivery functions and responsibilities to or from—

(i) a Provincial Government or a class of Provincial Governments; or

(ii) a person or body, or a class of persons or bodies.

Division 4.—Powers and Functions of Local-level Governments.
Subdivision A.—Law-Making Powers.

44. Law making powers of the Local-level Governments.

(1) Subject to the Constitution, this Organic Law, and a Provincial Government law, a Local-level Government may make laws on the following subject matters—

(a) labour and employment (but not industrial relations);

(b) labour or community industries;

(d) cemeteries;

(e) provision of water supply;

(f) provision of electricity;

(g) improvement of villages, towns, cities and communities;

(h) maintaining peace, good order and law through consultation, mediation, arbitration and community forums;

(i) dispute settlement;

(j) town, city, village and community planning;

(k) cottage industries;

(l) social services;

(m) bride and groom wealth;

(n) general licensing;

(o) community sport, recreation, cultural and industrial shows;

(p) local environment;

(q) local tourist facilities and services;

(r) housing;

(s) domestic animals, flora and fauna;

(t) human settlements;

(u) census and village or community records;

(v) traditional barter system;

(w) control on consumption and use of alcohol, betel nuts, and betel nut related products or any other marketable items;

(x) hygiene and sanitation;

(y) local trading (not mobile);

(z) the protection of traditional sacred sites;

(aa) community day work or service programmes;

(ab) the imposition of fines for breaches of any of its laws;

(ac) village communities;

(ad) local aid posts and clinics;

(ae) traditional and customary copyrights.
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(2) A law made under Subsection (1) shall have effect so far as it is not inconsistent with an Act of the Parliament made—

(a) before the coming into operation of this Organic Law; or

(b) in accordance with Section 41.
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(3) For the purposes of Subsection (2), a question—

(a) whether or not a law made under Subsection (1) is a law with respect to a matter specified in that subsection; or

(b) whether or not a law made under Subsection (1) is inconsistent with an Act of the Parliament,

is non-justiciable except at the instance of the National Government or of a Local-level Government.

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Subdivision B. ― Principal Administrative Functions, and Service Delivery Functions and Responsibilities of Local-level Governments.

45. Principal administrative functions, and service delivery functions and responsibilities of local-level governments.

(1) Subject to the Constitution and this Organic Law, an Act of the Parliament shall provide for—

(a) the principal administrative functions of Local-level Governments; and

(b) the assigned service delivery functions and responsibilities of Local-level Governments.

(2) An Act of the Parliament may provide for all or any of the following—

(a) the determination of, or the means of determining, the service delivery functions and responsibilities of Local-level Governments;

(b) the assignment of, or the means of assigning, service delivery

functions and responsibilities to—

(i) a Local-level Government or a class of Local-level Governments; or

(ii) a person or body, or a class of persons or bodies;

(i) a Local-level Government or a class of Local-level Governments; or

(ii) a person or body, or a class of persons or bodies;

(d) the reassignment of, or the means of reassigning, service delivery functions and responsibilities to or from—

(i) a Local-level Government or a class of Local-level Governments; or

(ii) a person or body, or a class of persons or bodies.

Division 5.—Judicial Matters.

46. Extent of powers as to judicial matters.

(1) Except as provided in this division and Division 6, a Provincial Government or a Local-level Government has no power to make laws relating to the establishment or administration of courts, or to the exercise of judicial power.

(2) Subsection (1) does not prevent—

(a) an Act of the Parliament from making provision, in accordance with Division 7, for the exercise or performance by a Provincial Government or a Local-level Government, of powers or functions (other than judicial powers or functions) in relation to the administration of courts or tribunals; or

(b) the establishment, by or under a provincial law, of tribunals of an administrative or quasi-judicial kind; or

(c) a provincial law or a local-level law from making provision for offences and fines and other punishments, penalties and forfeitures for offences against the provincial laws or local-level laws.

Division 6.—Provincial and Local-level Courts.

47. Village Courts.

(1) Subject to Subsection (2), a provincial law may, as permitted by and subject to Section 42, make provision for or in respect of the establishment and administration of village courts of civil or criminal jurisdiction, or both.

(2) The jurisdiction of village courts established under Subsection (1), is as determined by or under an Act of the Parliament, but in any event such courts shall have the jurisdiction vested, immediately before the coming into operation of this Organic Law, in village courts established under the Village Courts Act 1989.

48. Other Provincial Courts and Tribunals.

As permitted by, and in accordance with Section 42, a provincial law may make provision for and in respect of the establishment, jurisdiction and administration of other courts and tribunals (including commissions of inquiries) of civil or criminal jurisdiction, or both.

49. Court fees, fines, etc.

The powers of Provincial Assemblies under Division 5 and this division and in relation to courts and tribunals extend to matters relating to imposition of fees in, and the disposition of fines, penalties and forfeitures imposed by, such courts and tribunals.

Division 7.—Delegation of Powers.

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50. Delegation of legislative powers.

(1) This section does not—

(a) apply in respect of judicial powers and functions; or

(b) affect the operation of Section 209 (parliamentary responsibility) of the Constitution.
(2) An Act of the Parliament may make provision for, or in relation to, the exercise in, or in relation to, a province—

(a) by a Provincial Government or a Local-level Government; or

(b) as provided by a provincial law or a local-level law (not inconsistent with any Act of the Parliament) by or by direction of the Provincial Executive Council,
of any legislative power of the National Government, including a power to make subsidiary legislation, but not including a power to make—

(d) an Organic Law (including this Organic Law); or

(e) a law of a kind that can be made only as an emergency law within the meaning of Section 226 (Definitions for the purposes of Part X) of the Constitution.
(3) A provincial law may make provision for and in relation to the exercise by the National Government or a Local-level Government of any legislative power of the Provincial Government, including a power to make subsidiary legislation.

(4) A local-level law may make provision for and in relation to the exercise by the National Government or Provincial Government of any legislative power of a Local-level Government, including a power to make subsidiary legislation.

Division 8.—Withdrawal of Powers, Functions and Finances of Provincial Governments and Local-level Governments.

51. Withdrawal of powers, functions and finances.

(1) Where there are findings by—

(a) the Auditor-General—

(i) of corruption or abuse of power within a Provincial Government or a Local-level Government so as to render the government either ineffective or lacking in public respect and confidence; or

(ii) of failure by a Provincial Government or a Local-level Government to keep or cause to be kept proper accounts and records of transactions or dealings; or

(iii) that a Provincial Government or a Local-level Government has an ineffective internal control system; or

(iv) that a Provincial Government or a Local-level Government has failed to submit reports as required by law; or

(b) the Minister responsible for provincial and local-level government matters, or a Special Investigating Committee appointed for the purpose by the National Executive Council, that—

(i) there has been a breakdown in the administration of a province or local-level government area; or

(ii) there has been deliberate and persistent frustration of or failure to comply with lawful directions of the National Government; or

(iii) a Provincial Government or a Local-level Government has deliberately and persistently disobeyed applicable laws, including the Constitution, an Organic Law (including this Organic Law) or any national legislation applicable to the province or local-level government area; or

(iv) there has been a failure to carry out functions in accordance with the development policies and standards of the National Government,

the National Executive Council shall direct the Provincial Government or the Local-level Government concerned to rectify the matter and such direction shall specify the manner and time in which such rectification is to be carried out.

(2) Where a Provincial Government or a Local-level Government refuses or fails to comply with a direction issued under Subsection (1), the National Executive Council may—

(a) withdraw all or any of the powers and functions of; or

(b) withdraw and withhold all or any finances to; or

the Provincial Government or the Local-level Government, as the case may be.

(3) This section does not prevent the Auditor-General, the Minister responsible for provincial government and local-level government matters, or the Special Investigating Committee, as the case may be, from referring any person, including members of a Provincial Government, a Local-level Government or any other person, to the Ombudsman Commission, the Public Prosecutor, the Police or any other relevant authority for further investigation and action.

52. Return of powers and functions.

Subject to Section 53, the National Executive Council may, on the recommendation of the Minister responsible for provincial government and local-level government matters, given after receiving a report from the Auditor-General, the Minister responsible for provincial government and local-level government matters or the Special Investigating Committee, recommending the return of the powers and functions, direct that, with effect from a specified date, the Provincial Government or the Local-level Government is authorized to exercise all or any of the powers and functions withdrawn in accordance with Section 51.

53. Compliance with certain conditions.

(1) A Provincial Government or a Local-level Government to which Section 52 applies, for the period specified by the National Executive Council, shall—

(a) submit all its proposed financial estimates, including any Bill appropriating monies, to the National Executive Council for approval; and

(b) provide such reports, to the National Executive Council, on the financial management and other related matters as the Council may, from time to time, require.

(2) In addition to the requirements under Subsection (1), except with the prior approval of the National Executive Council, a Provincial Government or a Local-level Government shall not transfer funds from one activity or project item to another during the period specified in that subsection.

Division 9.—Suspension of Provincial Governments and Local-level Governments.
Subdivision A.—Suspension Generally.

54. Application of Subdivision A.

(1) This subdivision applies in relation to the suspension of a Provincial Government or a Local-level Government on a ground set out in Section 187E(1) (suspension of Provincial Governments and Local-level Governments) of the Constitution.

(2) This subdivision does not affect the operation of Section 187E(4) of the Constitution.

55. Grounds of suspension.

A Provincial Government or a Local-level Government may be suspended on a ground set out in Section 187E(1) (suspension of Provincial Governments and Local-level Governments) of the Constitution.

56. Powers of Minister where he is of the opinion that a ground for suspension may exist.

Where the Minister responsible for provincial government and local-level government matters is of the opinion that the ground for suspension of a Provincial Government or a Local-level Government exists or may exist, he may—

(a) require—

(i) in the case of a Provincial Government, the Provincial Governor; or

(ii) in the case of a Local-level Government, the Provincial Governor and the head of the Local-level Government concerned,

to appear before him and give an explanation of any matters which have come to the attention of the Minister; and

(b) report to the National Executive Council on any matters which appear to constitute grounds for suspension of the Provincial Government or the Local-level Government.

57. Duties of National Executive Council on submission of report, etc.

The National Executive Council shall consider any report and comments submitted under Section 56(b) and may—

(a) cause the Minister to make further inquiries; and

(b) require—

(i) in the case of a Provincial Government, the Provincial Governor; or

(ii) in the case of a Local-level Government, the Provincial Governor and the head of the Local-level Government concerned,

to attend before it and make explanations.

58. National Executive Council may suspend a Provincial Government or a Local-level Government.

Where, after considering—

(a) the report and comments submitted under Section 56(b); and

(b) any further report or explanation which it may have required under Section 57,

the National Executive Council is of the opinion that—

(d) the matter can only be put right by suspension,

the National Executive Council may, by notice in the National Gazette, provisionally suspend a Provincial Government or a Local-level Government.

59. Notification of suspension to Parliament.

(1) Where a Provincial Government or a Local-level Government has been provisionally suspended under Section 58, the Minister responsible for provincial government and local-level government matters shall—

(a) forward to the Speaker of the Parliament, for presentation to the Parliament—

(i) the report submitted under Section 56; and

(ii) any further report or a resume of any explanation obtained under Section 57; and

(iii) a copy of the National Executive Council decision; and

(b) within the first seven sitting days of the Parliament following the provisional suspension under Section 58, move a motion confirming the suspension.

(2) A vote on a motion under Subsection (1)(b) shall—

(a) be taken within the first seven sitting days following the tabling of a report from the National Investigation Committee as provided in Section 60; and

(b) be supported on a division, in accordance with the Standing Orders of the Parliament, by an absolute majority vote after opportunity for debate on the merits.

60. Investigation by National Investigation Committee.

(1) Where a motion confirming the suspension of a Provincial Government or a Local-level Government has been moved under Section 59(1)(b), the motion, together with the documents presented under Section 59(1)(a) shall stand referred to the National Investigation Committee for investigation into and report on the matters giving rise to the provisional suspension of that Provincial Government or Local-level Government.

(2) A report by the National Investigation Committee under Subsection (1) shall be submitted to the Speaker within 90 days following the date of referral.

(3) A report received under Subsection (2) shall be tabled by the Speaker, immediately if the Parliament is in session, or if the Parliament is not in session, on the next sitting day following its receipt by him.

61. National Investigation Committee.

(1) There is established a National Investigation Committee.

(2) The Committee shall consist of—

(a) a member of the National Security Council, appointed by the National Executive Council, who shall be the Chairman; and

(b) the Departmental Head of the Department responsible for provincial government and local-level government matters; and

(d) a member of the National Law and Order Committee, nominated by that Committee; and
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(e) the Departmental Head of the Department responsible for finance matters.

(3) The functions of the Committee are, in accordance with Section 60, to investigate into and report on the matters giving rise to the provisional suspension of a Provincial Government or a Local-level Government.

(4) For the purposes of the exercise and performance of its functions, the Committee may—

(a) summon witnesses, by instrument under the hand of the Chairman; and

(b) take evidence on oath or affirmation and administer oaths and affirmations for the purpose; and

(c) by instrument under the hand of the Chairman, require a person to produce a document, book or paper in his possession or control.

(5) A person who, when summoned or required under this section to give evidence or to produce a document, book or paper in his possession or control, fails without reasonable excuse (proof of which is on him)—

(a) to attend before the Committee at the time and place appointed in the summons or requirement; or

(b) to be sworn or make an affirmation; or

(d) to produce a document, book or paper,

is guilty of an offence.

Penalty: A fine not exceeding K500.00.

(6) When performing its functions, the Committee shall determine its procedures.

62. Passing of suspension motion and circumstances in which provisional suspension lapses.

(1) After consideration of a report tabled under Section 60(3), the Parliament may, by an absolute majority vote, confirm the suspension.

(2) Where a motion under Section 59(1)(b) has not been passed within the first 14 sitting days of the Parliament following the tabling of a report from the National Investigation Committee under Section 60, the suspension lapses.

63. Commencement of suspension.

The suspension of a Provincial Government or a Local-level Government takes effect at such time as is specified in the notice under Section 58, or if no such time is so specified at midnight on the day on which the notice is published in the National Gazette.

Subdivision B.—Effect, etc., of Suspension.

64. Application of Subdivision B.

(1) This subdivision applies in relation to the suspension of a Provincial Government or a Local-level Government—

(a) by the National Executive Council, provisionally, under Section 187E(1) (suspension of Provincial Governments and Local-level Governments) of the Constitution; or

(b) by the Parliament in accordance with Subdivision A; or

(c) by the National Executive Council in accordance with Section 187E(4) (suspension of Provincial Governments and Local-level Governments) of the Constitution.

(2) For the purposes of this subdivision, "suspension" includes provisional suspension.

65. Effect of suspension.

(1) Subject to Subsection (2), while a Provincial Government or a Local-level Government is suspended its powers and functions are, as provided for by Section 187E of the Constitution, divested from it and vested in the National Executive Council, to be exercised and performed in accordance with Sections 66 and 67.

(2) The suspension of a power or function of a Provincial Government or a Local-level Government does not affect—

(a) any right, privilege, obligation or liability acquired, accrued or incurred under or in respect of the suspended power or function; or

(b) any investigation, legal proceedings or remedy in respect of any such right, privilege, obligation or liability.

66. Exercise of legislative powers, etc., of suspended Provincial Governments and Local-level Governments.

(1) While a Provincial Government or a Local-level Government is suspended, the National Executive Council has and may exercise and perform, subject to Subsection (2), all the legislative powers, functions, duties and responsibilities of that Provincial Government or Local-level Government.

(2) A law made in the exercise of the power conferred by Subsection (1)—

(a) shall be made by the Head of State, acting with, and in accordance with, the advice of the National Executive Council; and

(b) shall be tabled in the Parliament as soon as practicable after being made; and

(c) unless earlier repealed, expires at the end of the period of seven sitting days of the Parliament after it is tabled, unless within that period the Parliament, by resolution, confirms it.
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67. Exercise of executive powers, etc., of Suspended Provincial Governments.

(1) While a Provincial Government is suspended, the National Executive Council has and may exercise and perform all the executive powers, functions, duties and responsibilities of that Provincial Government.

(2) The power conferred by Subsection (1) may be exercised—

(a) by the Head of State, acting with, and in accordance with, the advice of the National Executive Council; or

(b) subject to Subsection (3), and any decision or direction of the National Executive Council, by a Minister authorized by the National Executive Council for the purpose, acting on behalf of the Council.

(3) In performing his functions and responsibilities under Subsection (2)(b), the Minister shall be assisted—

(a) in the case of a province which is also an open electorate, by a Member of the Parliament from the province concerned appointed by the National Executive Council; and

(b) in any other case, by two Members of the Parliament from the province concerned, selected by the Members of the Parliament from that province and appointed by the National Executive Council.
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67A. Exercise of executive powers, etc., of Suspended Local-level Governments.

(1) While a Local-level Government is suspended, the Head of State, acting on advice, has and may exercise and perform all the executive powers, functions, duties and responsibilities of that Local-level Government.

(2) The power conferred by Subsection (1) may be exercised—

(a) by the Head of State, acting with, and in accordance with, the advice of the National Executive Council; or

(b) subject to any decision or direction of the National Executive Council, by—

(i) the Minister responsible for provincial government and local-level government matters; or

(ii) the Provincial Executive Council; or

(iii) the Member of the Parliament representing the open electorate in which the suspended Local-level Government is situated,

acting on behalf of the National Executive Council.

68. Validity and effect of exercise of suspended powers, etc.

(1) The exercise or performance of a power, function, duty or responsibility of a suspended Provincial Government or Local-level Government by the National Executive Council is as valid and effectual, and has the same effect, for all purposes as if it had been exercised or performed by the Provincial Government or the Local-level Government.

(2) All things that might have been done or suffered, or might have continued to be done or suffered, by or in relation to the suspended Provincial Government or Local-level Government may be done or suffered, or may continue to be done or suffered, by or in relation to the State in the name and on behalf of the suspended Government.

(3) The exercise or performance of a power, function, duty or responsibility of a suspended Provincial Government or Local-level Government by the National Executive Council does not affect the identity or existence of the Provincial Government or the Local-level Government and of its separate rights and liabilities, and for those purposes the National Executive Council shall be treated as the agent of the suspended Provincial Government or Local-level Government for all purposes.

Subdivision C.—Re-establishment.

69. Affirmation of power of re-establishment.

The provisions of this subdivision do not affect the operation of Section 187F (re-establishment of Provincial Governments and Local-level Governments) of the Constitution.

70. Lifting of suspension.

(1) The suspension of a Provincial Government or a Local-level Government in accordance with this division—

(a) in the case of a Provincial Government, may be lifted by the Parliament by an absolute majority vote; and

(b) in the case of a Local-level Government, may be lifted by the National Executive Council.

(2) The suspension of a Provincial Government or a Local-level Government by the National Executive Council under Section 187E(4) (suspension of Provincial Governments and Local-level Governments) of the Constitution may be lifted—

(a) by resolution of the National Executive Council; or

(b) by resolution of the National Parliament.

(3) A resolution lifting the suspension of a Provincial Government or a Local-level Government may not be rescinded or otherwise altered.

71. Post-suspension conditions.

(1) Where the suspension of a Provincial Government or a Local-level Government is lifted or has expired, the Provincial Government or the Local-level Government, as the case may be, shall comply with the requirements of Subsections (2) and (3).

(2) A Provincial Government or a Local-level Government to which Subsection (1) applies, shall, during a period specified by the National Executive Council—

(a) submit all its proposed financial estimates, including any Bill appropriating monies, to the National Executive Council for approval; and

(b) provide such reports to the National Executive Council on its financial management and other related matters, as the Council may, from time to time, require.

(3) In addition to the requirements under Subsection (2), except with the prior approval of the National Executive Council, a Provincial Government or a Local-level Government shall not, within the period referred to in Subsection (2), transfer funds from one activity or project item to another.

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PART IV.—INSTITUTIONAL STRUCTURE OF THE ADMINISTRATIVE AND FINANCIAL SYSTEM OF PROVINCIAL GOVERNMENTS AND LOCAL-LEVEL GOVERNMENTS.

Division 1.—Administrative System.

72. Provincial and Local-level Administrative System.

(1) A provincial and local-level administrative system is hereby established.

(2) A provincial and local-level administrative system shall consist of—

(a) the administrative institutions consisting of—

(i) the offices of Provincial Administrators and District Administrators; and

(ii) an extended service of the National Departments and other agencies; and
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(iii) Provincial Government and Local-level Government support services; and

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(iv) the District Development Authority; and

(b) the staffing as set out in Section 75.

(3) There shall be established in each province a Provincial Administrative Headquarters and in each district, a district administrative headquarters.

(4) The boundaries of the district for which each district administrative headquarters is responsible shall be the same as the open electorate of the Parliament in which the headquarters are situated.

73. Provincial and District Administrators.

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(1) Subject to Subsections (4) and (5) there shall be established—

(a) in each province, an office of Provincial Administrator; and

(b) in each district, an office of District Administrator.

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(2) All substantive appointments to offices of Provincial Administrator shall be made by the National Executive Council from a list of three persons submitted by the Provincial Executive Council.

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(2A) All temporary appointments to offices of Provincial Administrator shall be made by the National Executive Council in accordance with a recommendation from the Provincial Executive.

(2B) The revocation of appointment of Provincial Administrators appointed under Subsection (2) or (2A) shall be by the National Executive Council in accordance with a recommendation from the Provincial Executive.

(2C) The suspension from office of Provincial Administrators appointed under Subsection (2) or (2A) shall be by the National Executive Council in accordance with a recommendation by the Provincial Executive.
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(3) A District Administrator shall be appointed in the manner prescribed by an Act of the Parliament.

(4) Where a province is also an open electorate, there shall be only one office of an Administrator, who shall be known as the Provincial Administrator.
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(5) An Act of the Parliament shall make provision for—

(a) the selection criteria and procedures of appointment; and

(b) acting appointments; and

of Provincial Administrators and District Administrators.

74. Functions of the Provincial and District Administrator.

(1) The Provincial Administrator of a province—

(a) shall be the chief executive officer of the Provincial Government; and

(b) shall be the administrative head of the staff in the province; and

(d) shall maintain overall supervision and direction, in accordance with an Act of Parliament, over all officers and employees assigned or otherwise employed to carry out the functions of the National Government (other than the law enforcement agencies unless by special arrangement with these agencies) and the Provincial Governments and Local-level Governments; and
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(e) shall co-ordinate and monitor the roles and functions of the National Departments and agencies; and

(f) may by written instrument, delegate all or any of his powers (except this power of delegation) relating to a district, to the District Administrator of that district; and
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(g) shall co-ordinate policy formulation, planning and implementation of policies as required by Sections 25 and 106; and
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(h) shall liaise with the Provincial Government and Local-level Government support services on the overall functions of the Provincial Assembly and the Provincial Executive Council; and

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(i) shall liaise and consult with the Provincial Treasurer on budget and treasury matters; and
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(j) shall perform such other functions as are prescribed by this Organic Law or by an Act of the Parliament.

(2) Subject to Subsection (3), the District Administrator—

(a) shall be the chief executive officer of the Local-level Governments in a district; and

(b) shall be the administrative head of the staff in a district; and

(d) shall carry out the roles and functions of the Provincial Administrator, and where appropriate, the roles and functions of the National Departments and agencies, as approved by the Provincial Administrator; and
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(e) shall co-ordinate the support services for the Local-level Governments within a district; and
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(f) shall coordinate policy formulation, planning and implementation of Local-level Government policies and plans as required by Sections 33A and 106; and
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(g) shall liaise and consult with the District Treasurer on budget and treasury matters; and
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(h) shall perform such other functions as are prescribed by this Organic Law or by an Act of the Parliament.

(3) In performing the functions under Subsection (2), a District Administrator shall comply with any—
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(a) policy directions from the Provincial Governments and Local-level Governments; and

(b) administrative and functional directives from the Provincial Administrator; and

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75. Provincial Government and Local-level Government staffing.

The staff of a province and of a district shall consist of—

(a) the officers of the National Public Service assigned to the province for the purposes by the Departmental Head of the Department responsible for personnel matters under Section 76; and

(b) the members of the Teaching Service assigned to the province by the Teaching Service Commission to carry out teaching and educational functions; and

76. Assigned officers of the National Public Service.

(1) Subject to this division, officers of the National Public Service may be assigned on a full time basis to the provinces and districts.

(2) Subject to Subsection (3), the Departmental Head of the Department responsible for personnel matters, after consultation with the Provincial Administrator, may assign or withdraw officers of the National Public Service to perform duties in the provinces and districts.

(3) An Act of the Parliament shall make provision for the terms and conditions and other matters related to the engagement of officers assigned under Subsection (2).

77. Teaching Service.

An Act of the Parliament shall make provision for—

(a) the management of the teaching staff in the province; and

(b) the continued availability of the members of the Teaching Service to teach in—

(i) primary schools (including community schools and village self-help and tokples schools); and

(ii) other schools subject to the jurisdiction of the Provincial Government or the Local-level Government; and

78. Other staff.

(1) Subject to Subsection (2), the Provincial Administrator may enter into an arrangement with a governmental body other than the National Public Service, or with a non-governmental body for the purpose of engaging other persons to the staff of a province or district.

(2) Prior to entering into an arrangement under Subsection (1), the Provincial Administrator shall consult with the Departmental Head of the Department responsible for provincial government and local-level government matters and the Departmental Head of the Department responsible for personnel matters.

(3) An Act of the Parliament shall make provision for—

(a) the manner of appointment of persons referred to in Subsection (1); and

(b) the terms and conditions in relation to their appointments.
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79. General duties of the assigned etc., personnel.

The personnel assigned or engaged under this Division shall be responsible for—

(a) implementing the plans and policies of Provincial Governments and Local-level Governments; and

(b) implementing the policies of the National Government applicable to the province; and

(d) carrying out such functions and responsibilities required by the Provincial Government or the Local-level Government or prescribed by law; and

(e) maintaining peace and harmony in the interests of good government.

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80. Assigned Service Delivery Functions and Responsibilities.

(1) There shall be established, in a province and in a district, an extended service of the National Departments and agencies to carry out the assigned service delivery functions and responsibilities, to be headed by the Provincial Administrator and District Administrators.

(2) The role of the Departmental Head of each National Department shall be to—

(a) formulate the national policies and co-ordinate the implementation of those policies in the provinces and local-level government areas; and

(b) provide support to the Provincial Administrators and District Administrators with planning, professional service and consultancies, and to maintain standards as prescribed by the national laws; and

(d) build up capacity for purposes of carrying out public investment programmes.

(3) An Act of the Parliament shall determine the details of the administrative arrangements, functions and responsibilities between the National Departments, agencies (including law enforcement agencies) and the offices of the Provincial Administrator and District Administrator.
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81. Provincial Government and Local-level Government support services.

(1) An Act of the Parliament may make provision for the establishment of support services for Provincial Governments and Local-level Governments.

(2) The functions of the support services established under Subsection (1) shall be to provide professional and executive support services to the Provincial Governments and Local-level Governments.

(3) An Act of the Parliament shall make provision for the extent to which the Provincial Administrator and District Administrator may exercise control over the support services.

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Division 2. ― Provincial Government and Local-level Government Financial Arrangements.

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82. Outline of provincial government and local-level government financial arrangements.

From the fiscal year commencing on 1 January 2009, the finances of Provincial Governments and Local-level Governments shall consist of—

(a) receipts from taxes, fees and charges—

(i) imposed by provincial laws and local-level laws; and

(ii) imposed under delegation from the National Government in accordance with Section 50, or any other law; and

(b) distributions from the National Government as provided for by Division IV.2A; and

(c) the proceeds of court fees, fines and penalties as provided for by Sections 49 and 88 and other fees and charges under provincial laws and local-level laws as provided for by Sections 86 and 87; and

(d) the proceeds of certain borrowings in accordance with Section 101; and

(e) the proceeds of investments by them (including interest on bank deposits) and income from commercial enterprises conducted by them; and

(f) such other moneys as are lawfully available to them under this Organic Law, an Act of the Parliament, a provincial law or a local-level law.

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Division 2A. ― Division and Distribution of Revenue Among and Between the Levels of Government and Other Financial Arrangements.
Subdivision A. - Preliminary Matters.

82A.Matters to be taken into account in making an act under this division.

In making an Act of the Parliament of the kind referred to in this Division, the National Parliament shall take into account the following matters―

(a) the principles of equality and participation and of wise use of natural resources and the environment, as set out in Section 1(3);

(b) the need to encourage provincial governments and local-level governments to be self-sufficient;

(d) the debt-servicing and other financial obligations of the

National Government;

(e) the expenditure requirements of the National Government;

(f) the need to ensure that each Provincial Government and Local-level Government has a similar financial capacity to meet the costs of its assigned service delivery functions and responsibilities;

(g) the differing cost of providing services in different areas of the country;

(h) the level of development and the development needs of each province;

(i) the economic disparities between provinces;

(j) the financial capacity of each Provincial Government or Local-level Government;

(k) the revenue generated within a province;

(l) the benefits derived by the National Government or a Provincial Government or Local-level Government from a natural resource development within a province;

(m) the financial obligations (if any) of a Provincial Government or Local-level Government;

(n) the need to be flexible and to ensure that changes to intergovernmental financing arrangements are introduced in a manner that ensures their proper implementation.

Subdivision B.―Funding for Service Delivery.

82B. Interpretation of Subdivision B.

In this Subdivision―

“derivation basis”, in relation to revenue, means the sharing of revenue based on where the revenue was originally raised or collected;

“equalisation system” means a system under which an amount

of money is made available each year by the National Government to meet the costs of assigned service delivery functions and responsibilities;

“equitable distribution” is a distribution made by the National

Government to Provincial Governments, Local-level Governments and service delivery entities of an amount of money made available under the equalisation system and that -

(a) is made in accordance with the principles of equality and participation and of wise use of natural resources and the environment as set out in Section 1(3); and

(b) is made so that each Provincial Government and Local-level Government has a similar financial capacity to meet the costs of assigned service delivery functions and responsibilities;

“national revenue” means any taxes, fees, charges and other revenue received by the National Government.

82C. Division of revenue between levels of government for service delivery.

An Act of the Parliament shall provide for the division of revenue between the levels of government by way of―

(a) the establishment of an equalisation system; and

(b) the making of an equitable distribution from the equalisation system; and

(c) the sharing of national revenue between the National Government, and Provincial Governments and Local-level Governments; and

(d) the making of any other payments which the National Government determines shall be made to Provincial Governments, Local-level Governments and service delivery entities.

82D. Equitable distribution of revenue from equalisation system.

(1) An Act of the Parliament shall provide for―

(a) a method of calculation of the amount of money to be made available each year for distribution under the equalisation system; and

(b) an equitable distribution of that money to meet the costs of assigned service delivery functions and responsibilities; and

(i) the costs of assigned service delivery functions and responsibilities; and

(ii) any other revenue available to Provincial Government or a Local-level Government.

(2) An Act of the Parliament may provide for all or any of the following—

(a) the equitable distribution or any part of it to be made subject to conditions;

(b) the manner of payment of the equitable distribution;

(c) the amount to be distributed to a Provincial Government, a Local-level Government or a service delivery entity in some circumstances is zero;

(d) the nature or use of the equitable distribution or any part of it to be specified;

(e) any other matter necessary or convenient for making an equitable distribution.

(3) Subsection (1) does not prevent the Act of the Parliament from distinguishing between urban Local-level Governments and rural Local-level Governments.

82E. Shared national revenue distributed to provincial governments and local-level governments.

(1) An Act of the Parliament shall provide for the determination of, or the means of determining, the national revenue that is to be shared among Provincial Governments and Local-level Governments.

(2) An Act of the Parliament shall provide for the distribution of, or the means of distributing, the shared national revenue by the National Government to Provincial Governments and Local-level Governments on a derivation basis or some other basis.

(3) An Act of the Parliament may provide for all or any of the following―

(a) the distribution of the shared national revenue or any part of it to be made subject to conditions;

(b) the manner of payment of the shared national revenue;

(d) any other matter necessary or convenient for making adequate provision for the distribution of the shared national revenue.

82F. Payments for staffing.

(1) An Act of the Parliament shall provide for annual payments by the National Government to Provincial Governments and Local-level Governments for the salaries, allowances and other conditions of employment of such staff as are specified by or under that Act.

(2) An Act of the Parliament shall provide for a method of calculation of annual payments.

(3) An Act of the Parliament may provide for all or any of the following—

(a) the annual payments or any part of them to be made subject to conditions;

(b) the manner of making the annual payments;

(c) the amount of an annual payment to a Provincial Government or a Local-level Government in some circumstances is zero or less than the full cost of funding the relevant salaries, allowances and other conditions of employment;

(d) any other matter necessary or convenient for making adequate provision for annual payments.

82G. Additional payments.

(1) An Act of the Parliament shall provide for, or the means of determining, additional payments by the National Government to a Provincial Government or a Local-level Government if the Provincial Government or Local-level Government performs a function or has a responsibility which is not an assigned service delivery function or responsibility.

(2) An Act of the Parliament shall provide for the other circumstances in which an additional payment shall be made.

(3) An Act of the Parliament shall provide for a method of calculation of additional payments.

(4) An Act of the Parliament may provide for all or any of the following―

(a) the additional payments or any part of them to be made subject to conditions;

(b) the manner of making the additional payments;

(c) the amount of an additional payment to Provincial Government or a Local-level Government in some circumstances is zero;

(d) any other matter necessary or convenient for making adequate provision for additional payments.

82H. Transitional provisions.

An Act of the Parliament may provide transitional arrangements for or in relation to any matter under this Subdivision for a period of up to five years from the commencement of this section.

Subdivision C.― Arrangements to Address Development Needs and Related Matters.

82I. Interpretation of Subdivision C.

(1) In this Subdivision, “development needs” means the

disparities between different areas of the country which may result from all or

any of the following―

(a) a lack of infrastructure;

(b) a poor state of repair of infrastructure;

(d) the wealth or otherwise of the population;

(e) health indicators;

(f) educational levels;

(g) remoteness;

(h) potential threats to food security;

(i) any other factor.

(2) A reference in this subdivision to a “Provincial Government” includes a reference to a District Authority established under the District Authorities Act 2006.

(3) A reference in this subdivision to a “Local-level Government” includes a reference to a Local-level Government Special Purposes Authority established under the Local-level Government Administration Act 1997 or a District Authority established under the District Authorities Act 2006.

82J. Financial arrangements to address development needs.

An Act of the Parliament shall provide for financial arrangements to enable Provincial Governments and Local-level Governments to address development needs by way of―

(a) payments by the National Government under Sections 82K and 82L; and

(b) payments as set out in Sections 95A and 95B; and

(c) other mechanisms or arrangements to address development needs including but not limited to—
(i) the establishment of a financing facility or facilities; and

(ii) the facilitation of borrowing by Provincial Governments and Local-level Governments; and
(iii) the provision of benefits other than in cash.

82K. Specific payments to address development needs.

(1) An Act of the Parliament may provide for all or any of the following―

(a) the basis of entitlement to payments to address specific development needs;

(b) the method of calculating those payments;

(d) the making of those payments or any part of them to be subject to conditions;

(e) any other matter necessary or convenient for making specific payments.

(2) In providing for the specific payments, an Act of the Parliament may take into account―

(a) the amount of revenue received or likely to be received by the relevant Provincial Governments and Local-level Governments; and

(b) the following benefits—

(i) the benefits to Provincial Governments and Local-level Governments from prescribed infrastructure developments as described in the Income Tax Assessment Act 1959;

(ii) any other benefits that a Provincial Government or Local-level Government may receive.
(3) An Act of the Parliament may make provision for the definition and determination of a less-developed area, taking into account―

(a) the development needs of an area; and

(b) any other matters connected with those development needs.

82l. Other payments to provincial governments and local-level governments.

(1) An Act of the Parliament may provide for such other payments by the National Government to Provincial Governments and Local-level Governments for development or capital purposes, including but not limited to―

(a) payments that are provided for in agreements relating to the development of natural resources; and

(b) payments for development projects.

(2) An Act of the Parliament may provide for all or any of the following―

(a) the basis of entitlement to the payments;

(b) the method of calculation of the payments;

(d) provide for the making of the payments or any part of them to be subject to conditions;

(e) any other matter necessary or convenient for making specific payments.

(3) In providing for the payments, an Act of the Parliament may take into account―

(a) the amount of revenue received or likely to be received by the relevant Provincial Governments and Local-level Governments under any existing agreements relating to the development of natural resources; and

(b) the following benefits—

(i) the benefits to Provincial Governments and Local-level Governments from prescribed infrastructure developments as described in the Income Tax Assessment Act 1959;

(ii) any other benefits that a Provincial Government or Local-level Government may receive.

Division 3.—Provincial Government and Local-level Government Taxation.
Subdivision A.—Taxation Matters.

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83. Interpretation of Division IV.3.

In this Division―

“national road” means a road which the National Government

is responsible for maintaining in accordance with the Roads Maintenance Act 1971 or the National Roads Authority Act 2003;

“road user tax” means a tax paid by way of a toll by a user of a road, other than a national road;

“small craft” means a vessel that is not registered in Papua

New Guinea or any other country and that is ―

(a) less than 10 metres in length; or

(b) an air-cushioned vessel; or

other than a vessel of traditional build that is not used for commercial purposes.

84. Government exemptions.

(1) In this section, "income" includes dividends or other payments in the nature of dividends or returns from investments by the State or Provincial Government or a Local-level Government in commercial enterprises.

(2) Subject to Subsection (3) and to any agreement between the governments concerned—
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(a) the property and income of the State or of another Provincial Government or a Local-level Government is exempt from taxation under any provincial law or local-level law; and

(b) any property imported or obtained otherwise in accordance with law by a Provincial Government or a Local-level Government for its own use and not for sale or other disposal is not exempt from customs duties (including import duties) or excise duties imposed by law unless the Provincial Government or the Local-level Government has been exempted by an Act of the Parliament from paying such duties or excise; and

(c) other property and income of a Provincial Government or a Local-level Government is exempt from taxation under any Act of the Parliament; and

(d) a Provincial Government is exempt from stamp duties or similar charges under any Act of the Parliament; and

(e) the National Government and all Provincial Governments and all Local-level Governments are exempt from retail sales tax imposed under a provincial law or a local-level law so far as goods purchased by the National Government or by a Provincial Government or a Local-level Government for its own use and not for sale are concerned.

(3) Subsection (2) does not apply in relation to property or incomes of, or to property used for the purposes of—

(a) a commercial enterprise conducted by the State or by a Provincial Government or a Local-level Government; or

(b) an instrumentality of the National Government or of a Provincial Government or a Local-level Government.

(4) This section does not limit the power of the National Government or a Provincial Government or a Local-level Government to grant any exemption from taxation imposed by it.
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Subdivision B. ― Provincial Government and Local level Government Taxation.

85. Provincial and local level taxes, fees and charges in existence immediately before 1 January 2009.

Schedule 2 sets out savings and transitional provisions for provincial and local-level taxes, fees and charges that existed immediately before 1 January 2009.

86. Provincial taxes, fees and charges.

(1) A Provincial Government may impose either or both of the following taxes―

(a) a sales and services tax; and

(b) a road user tax.

(2) A sales and services tax may be imposed concurrently with any sales and services tax imposed by the National Government.

(3) A Provincial Government may impose all or any of the following fees and charges―

(a) fees for liquor licences;

(b) fees for registration of small craft;

(c) any other fees or charges in respect of goods or services supplied, rendered or made available, or to be supplied, rendered or made available—

(i) by or under a provincial law; or

(ii) in relation to a matter for which the Provincial Government has responsibility.

(4) An Act of the Parliament may further define the taxes, fees and charges referred to in Subsections (1) and (3).

(5) A provincial law shall provide for―

(a) the determination of the rates of taxes, fees and charges; and

(b) the manner of imposition of taxes, fees and charges; and

(6) A provincial law may provide for―

(a) arrangements between the National Government and Provincial Governments concerning taxes, fees and charges; and

(b) arrangements between Provincial Governments concerning taxes, fees and charges; and

87. Local-level taxes, fees and charges.

(1) A Local-level Government may impose a head tax on a natural person.

(2) A Local-level Government may impose all or any of the following fees and charges―

(a) land rates charged on the unimproved value of alienated land;

(b) fees for a general trading licence, including but not limited to a fee for a trade store licence and a fee for a peddler’s licence;

(d) fees for a domestic animal licence;

(e) any other fees or charges in respect of goods or services supplied, rendered or made available, or to be supplied, rendered or made available―

(i) by or under a local-level law; or

(ii) in relation to a matter for which the Local-level Government has responsibility.

(3) An Act of the Parliament may further define the taxes, fees and charges provided for in Subsections (1) and (2).

(4) A local-level law shall provide for―

(a) subject to Subsection (5), the determination of the rates of taxes, fees and charges; and

(b) the manner of imposition of taxes, fees and charges; and

(5) The rate of head tax is not to be calculated by reference to a person’s income.

(6) A local-level law may provide for―

(a) arrangements between the National Government and Local-level Governments concerning the taxes, fees and charges; and

(b) arrangements between Local-level Governments concerning the taxes, fees and charges; and

Subdivision C.—Other taxes and fees, etc.

88. Court fees and fines.

(1) Where a provincial law or a local-level law provides for the imposition of fines or penalties, or of forfeitures for any offence against any provincial law or local-level law, the amount of fines or penalties shall be paid, or the forfeitures shall be made, as the case may be, to the appropriate Provincial Government or Local-level Government.

(2) Where a provincial law or a local-level law provides for fees to be payable in any court, the amount of the fee shall be paid to the appropriate Provincial Government or Local-level Government.
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89.[Repealed]

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90. Anti-discrimination.

(1) An Act of the Parliament shall provide that the Minister responsible for preparation of the annual recurrent budget may by instrument in writing declare invalid a provincial or local-level law imposing a tax, fee or charge if—

(a) the law discriminates unjustly between any persons; or

(b) the law discriminates against persons who are not residents of the province; or

(d) the rate of the tax, fee or charge is set, wholly or partially, at an unreasonably high level; or

(e) the law unreasonably disadvantages any other Provincial Government or Local-level Government.

(2) An Act of the Parliament—

(a) shall provide that the Minister shall furnish reasons for the Minister’s decision to declare a law invalid; and

(b) may provide for the making of any orders by the Minister related to or consequent on that decision; and

(3) This section is in addition to and not in derogation of Section 141.

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Sections 91, 92, 93, 94, 95 and 97 [Repealed]

Subdivision D.—Financial Grants and Assistance.

^[113]
^[114] and ^[115]

95A. District Support Grants.

(1) For each year the National Government shall out of monies lawfully available for the purpose, make a District Support Grant in respect of each open electorate—

(a) one half of which shall be made to the Joint District Planning and Budget Priorities Committee in the open electorate, for the purpose of funding—

(i) the rural action programme; and

(ii) the urban rehabilitation programme; and

(b) one half of which shall be made to the Member representing the open electorate to be used in accordance with District Support Grant Guidelines issued under Subsection (7).

(2) The minimum amount of District Support Grant shall not be less than K300,00.00 per Open Electorate and shall be determined by the National Economic and Fiscal Commission in consultation with the Departmental Head of the Department responsible for finance matters and the Departmental Head of the Department responsible for planning matters.

(3) In determining the amount to which Subsections (1) and (2) refer, the National Economic and Fiscal Commission shall take into consideration the details of other grants made available to the Provincial Governments and Local-level Governments.
^[116]

(4) The minimum amount of the District Support Grant for each year for each open electorate shall be determined by the National Executive Council but shall be not less than—

(a) K300,000.00 for the fiscal year commencing 1 January 1998; and

(b) K500,000.00 for each succeeding fiscal year, for each open electorate.
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(5) The National Government shall, within the first month of each quarter of each fiscal year, make a payment of all monies due for the purposes of the District Support Grant for that quarter to the Joint District Planning and Budget Priorities Committee and to the Member representing the open electorate respectively.
^[118]
(6) The monies referred to in Subsection (4) shall be—

(a) paid through the District Treasury; and

(b) in the case of—

(i) the Joint District Planning and Budget Priorities Committee, paid directly to that Committee by the District Treasury; and

(ii) the Member representing the open electorate, paid on his behalf in accordance with the District Support Grant Guidelines issued under Subsection (7).
^[119]
(7) The National Executive Council shall, from time to time, issue District Support Grant Guidelines relating to the District Support Grant specifying—

(a) the purposes for which the portion of it payable under Subsection (3)(b) may be used; and

(b) the manner in which it shall be disbursed and accounted for; and

95B. Provincial Support Grants.

(1) For each fiscal year the National Government shall out of the monies lawfully available for the purpose, make a Provincial Support Grant in respect of each provincial electorate—

(a) one half of which shall be made to the Joint Provincial Planning and Budget Priorities Committee in the provincial electorate; and

(b) one half of which shall be made to the Member representing the provincial electorate, to be used in accordance with the Provincial Support Grant Guidelines issued under Subsection (5).

(2) The minimum amount of the Provincial Support Grant for each year for each provincial electorate shall be determined by the National Executive Council but shall be not less than—

(a) K300,000.00 for the fiscal year commencing 1 January 1998; and

(b) K500,000.00 for each succeeding fiscal year, for each provincial electorate.

(3) The National Government shall, within the first month of each quarter in each fiscal year make a payment of all the monies available for the purposes of the Provincial Support Grant under Subsection (1) for that quarter to the Joint Provincial Planning and Budget Priorities Committee and to the Member representing the provincial electorate respectively.

(4) The monies referred to in Subsection (4) shall be—

(a) paid through the Provincial Treasury; and

(b) in the case of—

(i) the Joint Provincial Planning and Budget Priorities Committee, paid directly to that Committee by the Provincial Treasury; and

(ii) the Member representing the provincial electorate, paid on his behalf in accordance with the Provincial Support Grant Guidelines issued under Subsection (5).

(5) The National Executive Council shall, from time to time, issue Provincial Support Grant Guidelines specifying—

(a) the purposes for which a Provincial Support Grant may be used; and

(b) the manner in which it shall be disbursed and accounted for; and

^[121]

95C. Provision of grants during fiscal years 2004 to 2008.

(1) The National Government, in the fiscal years commencing on 1 January 2004, 1 January 2005, 1 January 2006, 1 January 2007 and 1 January 2008―

(a) shall make the following grants to each Provincial Government―

(i) function grant; and

(ii) block grant; and

(iii) provincial and local level staff grant; and

(iv) derivation grant; and

(v) such other economic grants as are specified in any other law or agreement; and

(b) may make to a Provincial Government a less-developed districts grant; and

(c) shall make to each Local-level Government (other than urban Local- level Governments) a rural Local-level Government grant; and

(d) shall make to each urban Local-level Government a town services grant.

(2) The grants referred to in Subsection (1) shall be made and used in accordance with Schedule 1 and any Act of the Parliament made for the purpose.

(3) This section ceases to have effect on 31 December 2008.

Subdivision E.—Benefits from Natural Resources.

98. Benefits derived from natural resources.

(1) In this section, unless the contrary intention appears—

"developer" means a person who, in accordance with an agreement with the State or with the consent of the State, undertakes the development of a natural resource;

"natural resource" includes minerals, petroleum, gas, marine products, water, timber (including forest products), fauna, flora and any other product determined by law to be a natural resource;

"own cost" means monies expended by a developer for the purpose of development of a natural resource.

(2) Subject to Subsection (7), for each fiscal year, a developer of a natural resource, shall pay out of its own cost—

(a) to the Provincial Governments and the Local-level Governments of the province or area in which the development is situated, development levies in the form of—

(i) infrastructural development levies; and

(ii) economic development and land use follow-up levies; and

(iii) community and social development levies; and

(iv) any other levies as are from time to time determined by national law or by agreement; and
^[122]

(b) to the National Government, Provincial Governments or Local-level Governments, land owners benefits in respect of natural resources obtained, for payment to the owners of the land from which the natural resources were obtained.
^[123]

(3) The development levies shall be controlled through a trust fund which shall be managed and administered in accordance with an Act of the Parliament.
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(4) A developer shall provide to the National Government, Provincial Governments and Local-level Governments, expertise and professional support as to the use of the development levies.
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(5) All land owners benefits in the form of royalties, land owners premiums, compensation and other assistance, established by law or in accordance with an agreement, shall be paid to the land owners less deduction only for nominal tax (if applicable) and any recoveries for the cost incurred by the National Government, Provincial Governments or Local-level Governments, as the case may be.

(6) An Act of the Parliament shall make provision for the rates, management, sharing arrangement, and application of the development levies.

(7) The provision of this section do not affect existing arrangements relating to natural resources which are in force before the coming into operation of this Organic Law.

Subdivision F.—National Government Incomes.

99. Sharing of National Government Incomes.

(1) The National Government or its statutory agencies may, in accordance with an Act of the Parliament or by contract, share with Provincial Governments and Local-level Governments the revenues of the National Government generated from the sources within a province and a local-level government area.

(2) An Act of the Parliament shall make further provision for the revenues referred to in Subsection (1), and for the sharing arrangement between the National Government and Provincial Governments and Local-level Governments.

Subdivision G.—Investments.

100. Investment by Provincial Governments and Local-level Governments.

Investments by the Provincial Governments and the Local-level Governments shall be regulated by an Act of the Parliament.

Subdivision H.—Loans, Borrowings and Guarantees.

101. Loans, borrowings and guarantees by Provincial Governments and Local-level Governments.

Subject to national laws, Provincial Governments and Local-level Governments may borrow or obtain loans and give guarantees in relation to such borrowings and loans in accordance with an Act of the Parliament.

Subdivision I.—Accounting and Internal Control System.

102. Accounting records.

(1) A Provincial Government and a Local-level Government shall keep or cause to be kept proper accounts and records of their transactions and affairs, in accordance with an Act of the Parliament.

(2) The annual audited financial and other reports of a Provincial Government and a Local-level Government for each fiscal year shall be submitted to the Provincial Executive Council no later than 30 April in the year succeeding.

(3) An Act of the Parliament shall make provision for the internal organisation, accounting procedures, financial reports and financial management of Provincial Governments and Local-level Governments.

103. Internal control system.

(1) A Provincial Government shall set up an internal control and audit unit to ensure that, in respect of the Provincial Government and the Local-level Governments within the province—

(a) financial control mechanisms are in place; and

(b) proper records are kept for receipts and payments of money and of all other revenue earned but not received, and of all expenditure incurred but unpaid; and

(c) all transactions adhere strictly to the established procedures of internal control and of accepted accounting practices; and

(d) all expenditure including unpaid commitments do not exceed budgetary allocations during the fiscal year; and

(e) there is continuous consultation between the Provincial Treasury and the Provincial Audit Service.

(2) An Act of the Parliament shall make provision for the internal control procedures for Provincial Governments and Local-level Governments.

Subdivision J.—Inspection of Accounts.

104. Inspection of financial records.

An Act of the Parliament shall make provision for the rights and powers of the Departmental Head of the Department responsible for finance matters and persons authorized by him to inspect and report on accounts and records of a Provincial Government or a Local-level Government.
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Subdivision K.—Financial autonomy and responsibility.

105. Financial responsibility.

(1) Subject to this Organic Law and other Constitutional Laws, a province shall exercise full autonomy within the powers and functions as provided for in this Organic Law including financial responsibility.

(2) An Act of the Parliament shall make provision for the details of financial autonomy of a Provincial Government and a Local-level Government.
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105A. Financial responsibility.

(1) For each fiscal year there shall be a Provincial Government and a Local-level Government Budget comprising—

(a) estimates of—

(i) finances proposed to be raised; and

(ii) expenditure proposed for the provincial and district administration; and

(iii) expenditure proposed for the rural services; and

(iv) expenditure proposed for the urban services; and

(b) appropriation for the services of that year in respect of Subsection (1); and

^[128](2) and (3) [Repealed]

(4) If, at the beginning of a fiscal year, the Provincial Government and Local-level Government have not made provision for public expenditure for their respective services for that year, the Provincial Executive Council and Local-level Government, as the case may be, may, without authorization other than this Section but in accordance with an Act of the Parliament, expend amounts appropriated out of the General Revenue Fund for the purpose not exceeding in total one-third of its respective budgeted expenditure during the immediately preceding fiscal year.

(5) The authority conferred by Subsection (3) lapses when the Provincial Government and Local-level Government has made provision for the public expenditure for the fiscal year in question, and any amounts expended by virtue of that subsection are a charge against the expenditure so provided for and shall be properly brought to account accordingly.

(6) An Act of the Parliament shall make provision for the details of the financial responsibility of a Provincial Government and Local-level Government.
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Subdivision L.—Planning and Data System.

106. Provincial Planning and Data System.

(1) There shall be established in each province an extended service of the Department responsible for planning matters and of the National Statistical Office.

(2) The functions of these services are to establish and maintain an effective and efficient provincial and local-level planning and data system.
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(3) There shall be a census or the count of all natural persons in each province in the year proceeding a general election, other than—

(a) the general election held next after certification of this Organic Law; and

(b) a general election following a dissolution of Parliament under Section 105(1)(b) or (c) (General Elections) of the Constitution.

(4) An Act of the Parliament shall prescribe the types of records or data to be kept and details of the planning and data control system for the Provincial governments and Local-level Governments.

PART V.—CONSTITUTIONAL SUPERVISION, CONTROL AND ACCOUNTABILITY.

Division 1.—Leadership Control.

107. Disclosure of interest by Members of Provincial Governments and Local-level Governments.

(1) A member of the Provincial Government or the Local-level Government who is, or whose immediate family is, in any way directly or indirectly interested—

(a) in a contract made or proposed to be made by the Provincial Assembly or Local-level Government, or under consideration by the Provincial Assembly or Local-level Government; or

(b) in any other matter whatsoever which falls to be considered by the Provincial Assembly or Local-level Government,

shall disclose the nature of the interest at a meeting of the Provincial Assembly or Local-level Government.

(2) A disclosure under Subsection (1) shall be recorded in the minutes of the Provincial Assembly or Local-level Government, and the member shall not—

(a) in the case of a contract, take part after the disclosure in the deliberation or decision of the Provincial Assembly or Local-level Government with respect to that contract; and

(b) in the case of any other matter, take part in any deliberation or decision of the Provincial Assembly or Local-level Government with respect to the matter if the Provincial Assembly or Local-level Government decides that the interest in question might affect prejudicially the member's interest or consideration of the matter.

108. Misconduct in office.

A member of a Provincial Government or a Local-level Government who contravenes or fails to comply with the requirements of Section 107 is guilty of misconduct in office.

Division 2.—Administrative Control.
Subdivision A.—Personnel Management.

109. The assigned personnel.

The personnel matters including administrative arrangements relating to—

(a) members of the National Public Service shall be regulated by an Act of the Parliament to be administered by the Departmental Head of the Department responsible for personnel matters and the Public Services Commission; and

(b) members of the Teaching Service shall be regulated by an Act of the Parliament to be administered by the Teaching Service Commission; and

(i) an Act of the Parliament where applicable; or

(ii) a contractual arrangement as governed by the national laws.

Subdivision B.—Provincial and Local-level Service Monitoring Authority.

110. Establishment of Provincial and Local-level Service Monitoring Authority.

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(1) There is established a Provincial and Local-level Service Monitoring Authority within the Department responsible for provincial government and local-level government matters.

(2) The Authority shall consist of—

(a) a representative of each of the following Departmental Heads and National Agencies—

(i) the Department responsible for provincial government and local-level government matters who shall be the Chairman of the Authority;

(ii) the Department responsible for personnel matters;

(iii) the Department of the Attorney-General;

(iv) the Departments responsible for law and order and national security;

(v) other Departments and national agencies as determined by the National Executive Council from time to time; and

(b) a representative of the Chairman of the Teaching Service Commission; and

(d) such other persons (other than officers of the National Public Service) not exceeding three in number appointed by the National Executive Council, by notice in the National Gazette.

(3) The Authority shall establish in each province an Inspectorate to carry out the functions of the Authority to be administered by the Department responsible for provincial government and local-level government matters.

(4) The principal functions of the Authority are—

(a) to co-ordinate and monitor the implementation of the national policies at the provincial and local-level; and

(b) to establish minimum development standards and to monitor maintenance of those standards in the overall development of the rural and urban communities; and

(c) to assist the Auditor-General carry out the performance audit of the Provincial Government and Local-level Government affairs; and

(d) to develop, co-ordinate and monitor the training and professional needs of the officers of the National Public Service assigned to the provinces and districts; and

(e) to assess the effectiveness and efficiency of the Provincial Governments and the Local-level Governments; and

(f) to execute powers and functions that are delegated to it by law; and

(g) to make recommendations to the Minister responsible for provincial government and local-level government matters in the strengthening of the decentralisation of government; and

(h) to ensure that all appointments to offices in a Provincial Government and a Local-level Government are based on merit.
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(5) An Act of the Parliament may make provision for other functions and powers of, and the administrative arrangements for and other matters relating to the Authority and the Inspectorates.

Subdivision C.—Administrative Appeal System.

111. Provincial and Local-level Administrative Appeal System.

(1) The Public Services Commission shall establish and administer an administrative appeal system.

(2) An Act of the Parliament shall make provision for all matters relating to the administrative appeal system.

Subdivision D.—Provincial Treasury.

112. Establishment of Provincial and District Treasury.

(1) There shall be established in a province an extended service of the National Department responsible for finance matters to be known as the Provincial and District Treasury, to be headed by a Provincial Treasurer.

(2) The Provincial Treasurer shall be appointed by the Departmental Head of the Department responsible for finance matters after consultation with the Departmental Head of the Department responsible for personnel matters.
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(3) A person shall not be appointed as a Provincial Treasurer unless he is professionally qualified in accounting or economics and has substantial working experience in financial matters or is considered by the Departmental Head of the Department responsible for finance matters to be a suitably qualified person.

(4) The Departmental Head of the Department responsible for finance matters may assign such additional officers and employees as he considers necessary for purposes of adequately carrying out the functions of financial control under this Organic Law and in accordance with an Act of the Parliament.

(5) The role of the Provincial and District Treasurer is to ensure that public moneys are managed and released strictly in accordance with law.

(6) The Departmental Head of the Department responsible for finance matters shall oversee the affairs of the Provincial and District Treasury.

(7) An Act of the Parliament shall make provision for the specific functions, duties and the administrative arrangements of a Provincial and District Treasury.

(8) An Act of the Parliament shall make provision for the management of public moneys in the provinces.

Subdivision E.—Provincial Audit Service.

113. Provincial Audit Service.

(1) The Auditor-General, may, in accordance with an Act of the Parliament, establish a Provincial Audit Service in a province.

(2) The Head of a Provincial Audit Service shall be the Provincial Auditor who shall be appointed by the Auditor-General.

(3) The Auditor-General shall assign additional auditors and other officers and employees as he considers necessary for purposes of adequately carrying out audit functions under this Organic Law and in accordance with an Act of the Parliament.

(4) The functions of the Provincial Audit Service are to—

(a) maintain an effective and efficient audit service within a province; and

(b) extend the provisions of Section 214 (functions of the Auditor-General) of the Constitution, and of any Act of the Parliament relating to the inspection and audit of the accounts of governmental bodies including commercial statutory authorities in Papua New Guinea and of transactions referred to in Section 214(1) of the Constitution; and

(d) carry out performance audit of the officers of the Public Service and members of the Teaching Service and other State Services assigned to Provincial Governments and Local-level Governments.

(5) The accounts of Provincial Governments and Local-level Governments are to be audited annually and their accounts may be inspected at any time without notice by the Provincial Audit Service.

(6) A Provincial Auditor may take such action as he thinks necessary to satisfy himself that all the functions and the operations carried out by the Provincial Governments and the Local-level Governments are being carried out in an efficient and effective manner in accordance with law.

(7) An Act of the Parliament may make further provisions in relation to the functions and the duties of the Provincial Audit Service not inconsistent with the functions and duties conferred by the relevant provisions of the Constitution, this Organic Law and any other law.

(8) The annual audit report on a Provincial Government and a Local-level Government for a fiscal year shall be prepared by 30 April in the year succeeding and be submitted to—

(a) the Minister responsible for provincial government and local-level government matters who shall table it in Parliament at its meeting immediately following the receipt by him of the report; and

(b) the Minister responsible for finance matters; and

(d) the National Economic and Fiscal Commission.

(9) The Provincial Audit Service shall be adequately funded by the National Government.

(10) The Auditor-General may prosecute any person or persons for any unlawful acts in connection with the affairs of the Provincial Governments and the Local-level Governments concerned.

Subdivision F.—Year-end Accounts.

114. Submission of provincial accounts.

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(1) Each Provincial Government and Local-level Government is required to submit to the Minister responsible for provincial government and local-level government matters, and the Minister responsible for finance matters, a full statement of the financial position and of the affairs of the province and the local-level government area for each fiscal year in such a form and detail, and containing such other information as is regulated by an Act of Parliament, or as the Ministers require, before the final year sitting of the Parliament during the next fiscal year.

(2) Non-compliance with the provisions of Subsection (1) shall empower the Minister responsible for finance matters in consultation with the Minister responsible for provincial government and local-level government matters, to withhold, from payment to a Provincial Government or Local-level Government until compliance is secured, half of the funds appropriated for that fiscal year for the province or local-level government area.

(3) The statement referred to in Subsection (1) shall be accompanied by a full audit report.

(4) A copy of the statement referred to in Subsection (1) and of the audit report shall be made available to the National Economic and Fiscal Commission.

Division 3.—Control of Natural Resources.

115. Control of natural resources.

(1) Where there is a proposal to develop a natural resource in a province or provinces, the appropriate National Minister designated by the National Executive Council shall consult with the Provincial Government in the province or provinces where the natural resource is situated.

(2) The National Government, and the Provincial Governments and the Local-level Governments in the province or provinces where the natural resource is situated, shall liaise fully with the landowners in relation to the development of the natural resources.

(3) In this section, unless the contrary intention appears, "natural resource" has the same meaning as it has in Section 98.

116. Resource development process.

(1) For the purposes of Section 115, an Act of the Parliament shall make provision for—

(a) the type or types of development to which Section 115 applies; and

(b) the consultation process; and

(d) the extent to which the parties may participate in the development of the natural resources; and

(e) such other matters relating to the subject as are necessary.

^[135](2)[Repealed]

Division 4.—Inter-Government Relationship.
Subdivision A.—Fiscal Relationship.

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117. National Economic and Fiscal Commission.

(1) There is established a National Economic and Fiscal Commission.

(2) [Repealed]

(3) The members of the Commission shall be appointed by the Head of State acting on the advice of the National Executive Council, by notice in the National Gazette.

(4) The members of the Commission shall appoint one of their number to be the Deputy Chairman of the Commission.

(5) The Commission shall have the power to summon a person or persons to provide relevant information, reports and other documents for the purposes of the Commission.

(6) In the exercise and performance of its powers, functions, duties and responsibilities, the National Economic and Fiscal Commission shall not be subject to direction or control by any person or authority.

(7) and (8) [Repealed]

(9) The Commission shall at the end of each fiscal year furnish to the Minister responsible for finance matters a report on the working of the Commission for that year.

(10) The Minister shall cause a copy of the report furnished under Subsection (9) to be tabled in the Parliament at its next sitting and shall give copies of the report to other relevant Ministries and the Provincial Governments and the Local-level Governments.

(11) An Act of the Parliament shall provide for―

(a) the members of the Commission; and

(b) the terms and conditions of appointment of members; and

(d) the functions of the Commission, in addition to the functions as set out in Section 187H(1) of the Constitution; and

(e) the powers of the Commission, in addition to the powers in subsection (5); and

(f) the establishment of an office of the Secretariat to the Commission.

(12) A person who is a member of the Commission immediately before 1 January 2008 continues on and after that date as a member, and ceases to be a member on the date on which an Act of Parliament referred to in Subsection (11) comes into operation.

Subdivision B.—Mediation and Arbitration Power.

118. Mediation and Arbitration Tribunal.

(1) There is established a Provincial and Local-level Government Mediation and Arbitration Tribunal for the purposes of this Organic Law.

(2) All disputes between—

(a) the National Government and one or more Provincial Governments; or

(b) the National Government and one or more Local-level Governments; or

(d) between Provincial Governments; or

(e) between Local-level Governments,

shall be referred to the Provincial and Local-level Government Mediation and Arbitration Tribunal.

(3) An Act of the Parliament shall make provision for the composition, powers, functions and responsibilities of the Tribunal and of the mediation and arbitration process.

(4) A party or parties to a dispute which has been mediated or arbitrated by the Tribunal, shall not have access to any court for further hearing of the dispute, unless it is shown that the process of mediation and arbitration has been exhausted and that there is no possibility of settling the dispute as provided under this section.

PART VI.—FACILITATIVE PROVISIONS.

Division 1.—Report on the Workings of the Provincial Governments and Local-level Governments.

119. Reports on the affairs of Provincial Governments and Local-level Governments.

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(1) Each Provincial Government shall, by 30 June of each year, furnish to the Minister responsible for provincial government and local-level government matters, a report for the year ending 31 December preceding on the affairs of the Provincial Government and the Local-level Governments in the province.

(2) The Minister shall cause a copy of the report furnished under Subsection (1) to be laid before the Parliament before 31 December of the year in which it is furnished to him.

(3) A copy of the report furnished under Subsection (1) shall be furnished to the Minister responsible for financial matters, the relevant heads of all National Government Departments and national agencies, the National Economic and Fiscal Commission, the Provincial Government and any other relevant public bodies.

(4) An Act of the Parliament shall make provision for the form and contents of a report under Subsection (1).

(5) Failure to submit a report as required by this section shall constitute a ground for withdrawal of functions, powers and finances as provided by this Organic Law.

Division 2.—Repeal.

120. Repeal.

(1) Subject to this Part, the following laws are repealed—

(a) Organic Law on Provincial Government;

(b) Organic Law on Provincial Government (Amendment No. 1) Law;

(d) the Constitutions of all previous Provincial Governments.

(2) Subject to this Part, the repeal effected by Subsection (1) does not—

(a) revive anything (including a statute or any part of the underlying law) that was not in force or existing immediately before the repeal took effect; or

(b) affect the previous operations of the repealed provisions or anything duly done or suffered under them; or

(c) affect any right, privilege, obligation or liability acquired or incurred or offence committed against the repealed provision; or

(d) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and the penalty, forfeiture or punishment may be imposed, as if the repealed provisions had continued in force.

(3) In particular, the repeal effected by Subsection (1) does not—

(a) affect any liability under Division III.2 (Leadership Code) of the Constitution; or

(b) prevent the Ombudsman Commission or any tribunal established for the purpose of that Division from investigating any act, to which the repeal provisions were relevant.

(4) A reference in any law to the Organic Laws repealed by Subsection (1)(a), (b) and (c) or to any provision in these laws shall, insofar as is appropriate, be read as a reference to this Organic Law and to the corresponding provision of this Organic Law.

Division 3.—Interim, Savings and Transitional Arrangements.
Subdivision A.—Interpretation.

121. Interpretation.

In this Division and in Section 120, unless the contrary intention appears—
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"interim period" means the period on and from the date of coming into operation of this Organic Law in relation to all provinces other than Bougainville Province and the National Capital District until the date fixed for the return of the writs following the next general election held after that date of coming into operation;

"previous Provincial Assembly" means a Provincial Assembly established under the repealed laws and in existence immediately before the coming into operation of this Organic Law;

"previous Provincial Government" means a Provincial Government established under the repealed laws and in existence immediately before the coming into operation of this Organic Law, and includes a Provincial Government which was immediately before that coming into operation, under suspension;

"repealed laws" means the Organic Laws repealed by Section 120(1)(a), (b) and (c).

Subdivision B.—Abolition of Provincial Governments Constituted under the repealed Laws.

122. Abolition of Provincial Governments as constituted under the Repealed Laws and seats of members of those Provincial Governments.

(1) All the Provincial Governments as constituted under the repealed Organic Law cease to exist upon the coming into operation of this Organic Law.

(2) In all Provinces, whether or not the Provincial Government is suspended, the seat of each member of the previous Provincial Government shall cease to exist upon the coming into operation of this Organic Law.

(3) Each member of a previous Provincial Government shall be paid, as compensation for loss of office—

(a) such amount; and

(b) for such period of the incompleted term of office, not exceeding six months,

as determined by the Salaries and Remuneration Commission.

Subdivision C.—Interim Provincial Assembly.

123. Interim Provincial Government.

(1) There is established in each province an Interim Provincial Government for the purposes of governing the province in accordance with the provisions of this Subdivision for the interim period.

(2) An Interim Provincial Government shall comprise an Interim Provincial Assembly and an Interim Provincial Executive Council.

124. Powers of the Head of State.

(1) Until the Interim Provincial Assembly is constituted in accordance with Section 125, the legislative powers, functions and duties of a Provincial Assembly under this Organic Law are vested in and exercised by the Head of State acting on the advice of the National Executive Council.

(2) Until the Interim Provincial Executive Council is constituted in accordance with Section 128, the executive powers and functions of d Provincial Executive Council under this Organic Law shall be vested in and exercised by the Head of State acting on the advice of the National Executive Council.

125. Composition of Interim Provincial Governments.

(1) An Interim Provincial Government established under Section 123 which succeeds a previous Provincial Government shall comprise—

(a) all members of the National Parliament from that province; and
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(b) such number of—

(i) members of the previous Provincial Government; or

(ii) heads of Local-level Governments; or

(iii) prominent persons, selected in accordance with Subsection (2) and appointed by the Head of State, acting on the advice of the National Executive Council; and
^[140]

(ba) one representative of the urban Local-level Governments, nominated by the Papua New Guinea Urban Authorities Association, appointed by the Head of State acting on the advice of the National Executive Council; and

(i) from a list comprising not less than five names of persons submitted by the Provincial Executive Council concerned; and

(ii) appointed by the Head of State acting on the advice of the National Executive Council; and

(d) the person occupying the office of Premier in the previous Provincial Government.

(2) For the purposes of Subsection (1)(b), where—
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(a) the members of the previous Provincial Government are heads of Local-level Governments, the Open Member, in consultation with the Member of Parliament representing the province, shall select such number from the members of the previous Provincial Government to become members of the Interim Provincial Government; and

(b) there are no Local-level Governments in an open electorate, or part of an open electorate, the Open Member shall, in consultation with the member of the Parliament representing the provincial electorate, select—

(i) such number from the members of the previous Provincial Government; and

(ii) any other person with high standing, from within that open electorate or part of that open electorate as the case may be, to be members of the Interim Provincial Government; and

(c) there are Local-level Governments existing in an open electorate, and the members of the previous Provincial Government are not heads of the Local-level Government, the Open Member shall, in consultation with the member of the Parliament representing the provincial electorate, select such number from amongst the heads of Local-level Governments to be members of the Interim Provincial Government.

(3) The member of the Parliament representing the provincial electorate who is not disqualified by virtue of Section 19 shall be the Interim Governor of the Province and Chairman of the Interim Provincial Assembly, unless he decides not to take up the position within 21 days from the date of the establishment of the Interim Provincial Assembly in which case the Assembly shall elect from among the other Members of Parliament an Interim Governor of the Province who shall also be the Chairman of the Interim Provincial Assembly.

(4) In the event that the other Members of Parliament referred to in Subsection (3) are disqualified by virtue of Section 19 or are otherwise unwilling or unable to take up the position of Interim Governor and Chairman of the Interim Provincial Assembly, the members of the Interim Provincial Assembly shall elect from among their members referred to in Subsection (1)(b), an Interim Governor of the Province who shall also be the Chairman of the Interim Provincial Assembly.
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(5) Subject to Subsection (5A), the Premier of the previous Provincial Government shall become the Interim Deputy Governor of the Province and the Interim Deputy Chairman unless he decides not to be a member within 21 days from the date of establishment of the Interim Provincial Assembly in which case, the Interim Provincial Government shall elect the Interim Deputy Governor of the Province who shall also be the Interim Deputy Chairman, from amongst the members referred to in Subsection (1)(b).

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(5A) An Interim Provincial Assembly may, by a two-thirds absolute majority vote, resolve that the Premier of the previous Provincial Government shall not continue to hold the offices of Interim Deputy Governor and Interim Deputy Chairman and where an Interim Provincial Assembly so resolves the Premier ceases to hold such offices and the Interim Provincial Assembly shall elect an Interim Deputy Governor, who shall be Interim Deputy Chairman, from amongst the members referred to in Subsection (1)(a) and (b).

(6) The total number of members of an Interim Provincial Government shall not exceed the total membership of the previous Provincial Government.

(7) The remuneration, privileges and other benefits of office of the members of the Interim Government shall be as determined by the Salaries and Remuneration Commission.

(8) The Interim Provincial Government shall determine its own procedures, quorums and number of meetings.

(9) The Member of the Parliament representing the provincial electorate who holds a position mentioned in Section 19(1)(b) may resign that position to become the Interim Governor and Chairman of an Interim Provincial Government.
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(10) [Repealed]

126. Functions and powers of Interim Provincial Government.

(1) The Interim Provincial Government shall perform the functions and exercise all or any of the powers of a Provincial Government under this Organic Law during the interim period.

(2) An Interim Provincial Government shall exercise in particular all the powers that are necessary for the purpose of establishing an administrative base to facilitate the operation of this Organic Law.

(3) An Interim Provincial Government may exercise all or any of the powers in Division III.4 during the interim period.

127. Meetings.

The Head of State, acting on advice, shall call the first meeting of an Interim Provincial Government within 60 days immediately following the coming into force of this Organic Law, and there shall be not less than four meetings of the Interim Provincial Government in each period of 12 months calculated on and from the date of coming into operation of this Organic Law.

128. Interim Provincial Executive Council.

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(1) An Interim Provincial Executive Council shall consist of—

(a) the Interim Chairman; and

(b) the Interim Deputy Chairman; and

(d) not less than two Open Members, who are not disqualified under Section 19(1)(b), elected by the Interim Provincial Assembly.

(2) An Interim Provincial Executive Council shall exercise and perform all the powers and functions of the Provincial Executive Council under this Organic Law.
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(3) For the purposes of Subsection (2), the Interim Chairman and the Interim Deputy Chairman shall exercise and perform all the powers and functions of the Governor and Deputy Governor, respectively.

(4) The total membership of the Interim Provincial Executive Council shall not exceed one-third of the total membership of the Interim Provincial Assembly.
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128A. System of Committees for Interim Provincial Executive Councils.

(1) An Interim Provincial Executive Council may—

(a) establish an Interim Joint Provincial Planning and Budget Priorities Committee; and

(b) establish such number of other interim committees (including interim permanent committee) as it considered necessary to carry out its functions; and

(2) The interim committees of the Interim Provincial Executive Council—

(a) in the case of the Interim Joint Provincial Planning and Budget Priorities Committee—shall consist of the members referred to in Section 25(2); and

(b) in any other case—shall consist of the members of the Interim Provincial Assembly.

(3) Subject to any directions of the Interim Provincial Executive Council—

(a) the Interim Joint Provincial Planning and Budget Priorities Committee, has and may exercise all or any of the powers and functions of the Joint Provincial Planning and Budget Priorities Committee; and

(b) all the other interim committees of the Interim Provincial Executive Council have and may exercise all or any of the powers and the functions of the committees of the Provincial Executive Council,

constituted in accordance with Section 25.
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128B. Interim Joint District Planning and Budget Priorities Committee.

(1) There shall be established, in each district, an Interim Joint District Planning and Budget Priorities Committee.

(2) The composition, functions and powers of an Interim Joint District Planning and Budget Priorities Committee shall be the same as the composition, functions and powers of a Joint District Planning and Budget Priorities Committee constituted in accordance with Section 33A.

129. Administrative system.

(1) Subject to this section, the administrative system (including staff) which provided professional and technical services to the previous Provincial Government under the laws repealed by Section 120 shall continue to provide the same services to the Interim Provincial Government.
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(2) The existing administrative and financial system (including staff and financial arrangements) shall cease to operate after one year following the coming into force of this Organic Law or when the new administrative system is in place, whichever shall first happen.
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130. Provincial Government and Local-level Government Properties, Assets and Liabilities.

(1) Subject to this Organic Law, all assets and obligations and liabilities of the Provincial Government established under the repealed Laws immediately before the coming into operation of this Organic Law are, on that coming into operation, transferred to and become assets, obligations and liabilities of the Interim Provincial Government.

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(2) Subject to this Organic Law, all assets and obligations and liabilities of a Local-level Government which was in existence under the Local Government Act (Chapter 57) or by or under a provincial law, are, on the coming into operation of this Organic Law, transferred to and become assets, obligations and liabilities of a Local-level Government continued in existence in accordance with the Local-level Government System (Interim and Transitional Arrangements) Act 1995.

131. Continuity of Government.

(1) For all intents and purposes, the Interim Provincial Government continues to operate as a successor of the former Provincial Government as if the latter body had been constituted as the former body in accordance with the provisions of this Organic Law.

(2) Nothing in this Division affects the continued existence and operation, during the interim period, of Local-level Governments in whatever form at the date of the coming into force of this Organic Law.
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(3) Notwithstanding Subsection (2), an Interim Provincial Assembly shall within the interim period, take all action necessary to ensure compliance with the requirements of Section 26(4) and (5).

132. Adoption of former Provincial and other laws.

(1) Subject to this section, notwithstanding the repeal of the laws referred to in Section 120, the laws of a previous Provincial Government (other than the Constitution of a previous Provincial Government) in force immediately before the coming into operation of this Organic Law shall continue in force up to and including 60 days after the commencement of this Organic Law.

(2) Any references in laws continued in operation under Subsection (1) to offices or bodies established under the laws repealed by Section 120 shall be read as references to corresponding offices or bodies established under this Organic Law.

(3) An Interim Provincial Government may adopt or re-enact the laws of a previous Provincial Government to the extent that they comply with the provisions of this Organic Law.

Subdivision D.—Savings, etc.

133. Saving of contracts etc.

All contracts and agreements, other than contracts of employment, entered into, made with or addressed to the previous Provincial Government are, to the extent that they were immediately before the date of coming into operation of this Organic Law binding on and enforceable against the previous Provincial Government binding on and of full force and effect against or in favour of the Interim Provincial Government as fully and effectually as if the Interim Provincial Government had been a party to them or bound by them or entitled to the benefit of them.

134. Registration of title of land.

(1) Where any property vested in the previous Provincial Government is land registered under the Land Registration Act 1981 the Registrar of Titles, shall, without formal transfer, on application in that behalf by the Interim Provincial Government, enter the Interim Provincial Government on the register kept under that Act, and on entry or registration, grant a certificate of title, lease or other instrument evidencing title to the land within that Act.

(2) No stamp duty or other duty, tax or fee is payable on a registration made under Subsection (1).

135. Ending legal proceedings.

Where, immediately before the commencement date, any arbitration, action or proceeding was pending or existing by, against or in favour of the previous Provincial Government, it does not, on the commencement date, abate or discontinue but it may be prosecuted, continued or enforced by, against or in favour of the Interim Provincial Government.

136. Transfers etc., from Interim Provincial Government to Provincial Government.

On the expiration of the interim period, the savings and transitional provisions of this Division as applying between previous Provincial Governments and Interim Provincial Governments shall apply as appropriate between Interim Provincial Governments and Provincial Governments and the provisions shall be read to give effect to this.
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136A. Application of other laws.

Where—

(a) any Organic Law (other than this Organic Law), Act or subordinate enactment; or

(b) any instrument or document wherever made or executed,

contains a reference, express or implied, to—

(d) an office established by or under, the repealed laws,

that reference shall, except where the context otherwise requires, be read as a reference to the equivalent provision or office under this Organic Law.

137. Directions.

The Head of State, acting on advice, may, by notice in the National Gazette, issue such directions not inconsistent with any express provision of this Organic Law, as the National Executive Council considers are necessary or desirable for giving effect to the interim arrangements provided by this Part.

Division 4.—Interpretation of Provincial Laws and Local-level Laws.

138. Interpretation of Provincial Laws and Local-level Laws.

All provincial laws and local-level laws shall be read and construed subject to this Organic Law and to the other Constitutional Laws, and so as not to exceed the authority to make them properly given, to the extent that where any such law would, but for this section, have been in excess of the authority so given it is nevertheless a valid law to the extent to which it is not in excess of that authority.

Division 5.—Consultation Generally.

139. Consultation generally.

(1) The Minister responsible for provincial government and local-level government matters shall, if so requested by the Head of a Provincial Executive, consult with the Provincial Executive Council on any proposed Act of the Parliament relating to subjects to which Section 42 and 44 apply.

(2) Failure to comply with Subsection (1) in relation to a law does not invalidate the law.

Division 6.—Notice of Provincial Laws and Local-level Laws.

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140. Notice of Provincial Laws and Local-level Laws.

(1) Failure to comply with this section in relation to a law does not invalidate the law.

(1A) In this section―

“appropriate Minister” means―

(a) in relation to a law which is not a financial law— the Minister responsible for intergovernmental relations; or

(b) in relation to a financial law―the Minister responsible for preparation of the annual recurrent budget;

“financial law” means a law authorising the appropriation of monies or a law imposing taxes, fees or charges.

(2) If—

(a) a Provincial Government or a Local-level Government asks the appropriate Minister that the provisions of this section be waived in relation to any proposed provincial law or local-level law, or to any proposed amendments to a proposed provincial law or a local-level law; and

(b) the Minister thinks that it is in the public interest to do so,

the Minister may, in writing, waive the requirements of this section in relation to the proposed law or to all or any amendments to the proposed law.

(3) Before a provincial law or a local-level law is made, the Provincial Government or the Local-level Government shall give to the appropriate Minister by registered post, or otherwise in the quickest practicable manner, copies of the text of the proposed law and of any amendments made or proposed to be made to the proposed law.

Division 7.—Commencement of Provincial Laws and Local-level Laws.

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141. Commencement of provincial laws and local-level laws.

(1) For the purposes of this section―

“appropriate Minister” means―

(a) in relation to a law which is not a financial law―the Minister responsible for intergovernmental relations; or

(b) in relation to a financial law―the Minister responsible for preparation of the annual recurrent budget;

“financial law” means a law authorising the appropriation of monies or a law imposing taxes, fees or charges.

(2) Notwithstanding anything in any provincial law or local-level law, Provincial Government or a Local-level Government has full powers to make laws as provided for in this Organic Law.

(3) The—

(a) Provincial Government, in the case of a provincial law; and

(b) Local-level Government, in the case of a local-level law,

shall give a copy of the law by registered post, or otherwise in the quickest practical manner, to the appropriate Minister.

(4) Subject to Subsection (5), a provincial law or a local-level law shall not take effect until it is approved by the appropriate Minister.

(5) Where the appropriate Minister has not made a decision as to whether or not to approve a provincial law or local-level law within 60 days on and from the date on which the law was served on him, the law shall be deemed to have been approved by him.

Schedule 1.

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Schedule 1 - Grants payable to Provincial Governments and Local-level Governments for the fiscal years commencing 1st January 2004, 1st January 2005, 1st January 2006, 1st January 2007 and 1st January 2008.

Sch. 1.1. Function Grants.

1.1.1. The National Government shall make to each Provincial Government a separate function grant for the cost of the administration in the province of each of the following-

(a) primary health;

(b) basic education;

(c) maintenance of transport infrastructure and buildings; and

(d) village court officials allowances.

1.1.2. When a function grant is made, the National Government –

(a) shall specify the purpose (being one of the purposes specified in Section Sch. 1.1.1) for which it is made; and

(b) may specify that the grant may be used to meet the cost of salaries, wages or capital items (other than maintenance).

1.1.3. A Provincial Government –

(a) shall use a function grant only for the purposes specified in accordance with Section Sch. 1.1.2(a); and

(b) may use a function grant to meet the cost of salaries, wages or capital items (other than maintenance) only if specified in accordance with Section Sch. 1.1.2(b); and

(c) shall allocate to spend at least one half of each function grant in the districts.

1.1.4. The amount of function grants shall be calculated in accordance with Section Sch. 1.3.

Sch. 1.2. Block Grants.

1.2.1. The National Government shall make to each Provincial Government a block grant.

1.2.2. Subject to Section Sch. 1.2.3, the use of the block grant should be at the discretion of the Provincial Government.

1.2.3. The Provincial Government shall allocate to spend at least one half of the block grant in the districts.

1.2.4. The amount of the block grant shall be calculated in accordance with Section Sch. 1.3.

Sch. 1.3. Calculation of Function Grants and Block Grants.

1.3.1. The minimum amount to be available for apportionment, in accordance with Section Sch. 1.3.2, between functions grants and the block grant to a province, shall be calculated in accordance with the formula –

(a) K10 per head of population of the province (being the population of the province according to the most recent national census figures); plus

(b) K4 per square kilometre of the certified land mass of the province.

1.3.2 The National Executive Council shall, in consultation with the Provincial Government concerned, determine the proportion of the minimum grant calculated in accordance with Section Sch. 1.3.1 (or such larger amount as may be determined by the National Government) which is to be applied to the function grants and the block grant for the province.

Sch. 1.4. Provincial and Local-level Staff Grant.

1.4.1. The National Government shall make to each Provincial Government and Local-level Government a provincial and local-level staff grant.

1.4.2. The amount of the provincial and local-level staff grant shall be an amount equal to the sum of the salaries and allowances, and the cost of other conditions of employment as prescribed by an Act of Parliament, for the –

(a) offices of the Provincial Administrator and District Administrators as provided for in Section 73;

(b) extended service of the National Departments and agencies as provided for in Section 80;

(c) teaching services as provided for in Section 77;

(d) other staff as provided for in Section 78; and

(e) Provincial Government and Local-level Government
Secretariats as provided for in Section 81.

1.4.3. A –

(a) provincial staff grant shall be used towards the cost of staffing referred to in Section Sch. 1.4.2; and

(b) local-level staff grant shall be used towards the cost of staffing referred to in Section Sch. 1.4.2.

1.4.4 The provisions of Section Sch. 1.4 do not limit the right of a Provincial Government or Local-level Government to apply any revenues raised by the Provincial Government or the Local-level Government to the cost of their staffing.

Sch. 1.5 Derivation Grant.

1.5.1. In Section Sch. 1.5 –

“export value”, in relation to a primary product, means, subject to Section Sch. 1.5.2, the FOB value at the port or airport of export;

“port or airport of export”, in relation to any primary product, means the port or airport at which the primary product is entered for export;

“primary product” includes timber, fish, agricultural products, but does not include –

(a) any product more than 40% of the components of which are imported; or

(b) any product the province of origin of which cannot be determined, except where the product is processed and a value-added component due to processing can be attributed to a particular province;

“processing”, in relation to any primary product, includes any package, or submission to any process of manufacture, by which the export value of the primary product is increased; and

“province of production” means the province in which the

primary product was produced.

1.5.2. Where for the purposes of the calculation of the amount of tax payable under any Act of the Parliament an export value is attributed to or determined for any primary products, the value so attributed (or if there is more than one such value, the higher or highest of them) shall be deemed to be the export value of the primary products for the purposes of this Schedule.

1.5.3. The National Government shall pay to each Provincial Government a derivation grant.

1.5.4. The derivation grant is calculated at the rate of 0.75% of the export value of the primary products produced or processed in the province, other than primary products in respect of which the province receives a royalty.

1.5.5. In the case of goods exported from Papua New Guinea without processing in any province of production, the export value of the goods shall be attributed to the province of production.

1.5.6. In the case of any goods exported from Papua New Guinea that have been processed, before export, in a province other than the province of production, the export value of the goods shall be apportioned between the province of production and the province in which the processing took place, in accordance with the amounts of proportions of that value that are attributed to the unprocessed goods and to the processing, respectively.

1.5.7 For the purpose of the application of Section Sch. 1.5.6. to goods that are processed more than once, the reference in that Section to the amount or proportion of the export value that is attributable to the processing shall be read as a reference to the amount or proportion of that value that is attributable to any re-processing, and the balance of the value shall be apportioned as if –

(a) the goods were exported immediately before the re-processing; and

(b) that balance was the export value of the goods.

1.5.8. Where the origins or value of goods, including fish, cannot be identified or where the goods were taken or processed, the National Economic and Fiscal Commission shall, for the purposes of this Schedule, apportion the export value of the goods in such reasonable manner as seems to it just and in accordance with the purposes of this Schedule.

1.5.9. A Provincial Government shall use the derivation grant only for –

(a) promoting the production of primary products for export and for secondary processing and export; and

(b) rehabilitating the infrastructure necessary to enable the producers of primary products, whether processed or not, to convey their products to a port or airport or other market place.

Sch. 1.6. Other Economic Grants.

1.6.1. The National Government shall make available to Provincial Governments and Local-level Governments such other economic grants as are specified in any other law or agreement.

Sch. 1.7. Rural Local-level Government Grant.

1.7.1. The National Government shall pay to each Local-level Government (other than urban Local-level Governments) a rural Local-level Government grant in accordance with this section.

1.7.2. The minimum amount of rural Local-level Government grant for each province to be available for distribution in accordance with Section Sch. 1.7.3 shall be calculated in accordance with the formula –

(a) K3 per head of the rural population of the province (being population of the province according to the most recent national census, less the population of the urban areas in the province according to the most recent national census); plus

(b) K2 per square kilometre of the certified land mass of the province.

1.7.3. The rural Local-level Government grant for a province shall be apportioned between the Local-level Governments (other than urban Local-level Governments) in the province in accordance with the population of the Local-level Government areas.

1.7.4 The amount apportioned for a Local-level Government in accordance with Section Sch. 1.7.3 shall be paid directly to the Local-level Government through the Provincial and District Treasury.

1.7.5. A Local-level Government in receipt of an amount of rural Local-level Government grant under this section shall –

(a) use the grant to fund the functions which are the responsibility of that Local-level Government; and

(b) not use the grant towards the payment of salaries, fees or allowances unless the National Government gives specific authorisation.

Sch. 1.8. Town Services Grant.

1.8.1. The National Government shall pay to each urban Local-level Government a town services grant in accordance with this section.

1.8.2. The minimum amount of town services grant for each province to be available for distribution in accordance with Section Sch. 1.8.3 shall be calculated at the rate of K9 per head of urban population (being the population according to the most recent national census of townships
in the Province declared prior to the coming into operation of this provision, under any Act of the National Parliament relating to the declaration of town boundaries and townships).

1.8.3. The town services grant for each province shall be apportioned
between the urban Local-level Governments in the province in accordance with the population of each urban area.

1.8.4 The amount apportioned for an urban Local-level Government in accordance with Section Sch. 1.8.3 shall be paid directly to that Local-level Government through the Provincial and District Treasury.

1.8.5. An urban Local-level Government in receipt of an amount of town services grant under this section shall use the grant only to fund the functions for which it is responsible.

Sch. 1.9. Less-developed District Grant.

1.9.1. The National Government may make a less-developed district grant to a Provincial Government in accordance with this section.

1.9.2. Where the National Executive Council determines that –

(a) a district within a province is a less-developed district; and

(b) the Provincial Government of that province lacks the fiscal capacity to address underdevelopment in that district through the use of its own resources,

it may direct the making of a less-developed district grant to that province.

1.9.3. Before making a determination under Section Sch. 1.9.2 the National Executive Council shall consider a report from the National Economic and Fiscal Commission –

(a) as to which districts are considered as less-developed; and

(b) as to the amount of internal revenue likely to be received by the Provincial Government in the fiscal year.

1.9.4. The total amount available to a Provincial Government as less-developed district grant shall be divided equally among the less-developed districts in respect of which the grant is made.

1.9.5 Subject to Section Sch. 1.9.4, a Provincial Government in receipt of a less-developed district grant shall obtain the approval of the Departmental Head of the Department responsible for national planning and monitoring matters, in consultation with the Departmental Head of the Department responsible for finance matters, to all projects for the expenditure of the grant, before implementation of such projects.

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Schedule 2.
Transitional and savings arrangements for certain provincial and local-level taxes, fees and charges.

1. Interpretation.

In this Schedule―

“commencement date” means 1 January 2009;

“new law” means this Organic Law as in force on and after 1 January 2009;

“old local-level law” means―

(a) a local-level law that is in force immediately before the commencement date and that imposes a tax, fee or charge; or

(b) any delegation made under an Act of the National Parliament or any other law, being a delegation that in force immediately before the commencement date and under which a tax, fee or charge is collected and retained by a Provincial a Local level Government; or

(c) any other legal instrument or arrangement that is in force immediately before the commencement date and under which a tax, fee or charge is collected and retained by a Local level Government;

“old provincial law” means―

(a) a provincial law in force immediately before the commencement date and that imposes a tax, fee or charge; or

(b) any delegation made under an Act of the National Parliament or any other law, being a delegation that is in force immediately before the commencement date and under which a tax, fee or charge is collected and retained by a Provincial Government; or

(c) any other legal instrument or arrangement that is in force immediately before the commencement date and under which a tax, fee or charge is collected and retained by a Provincial Government.

Continuation of certain old provincial laws.

(1) Subject to subsection (2), an old provincial law continues in force on and after the commencement date as if it had been made under the new law.

(2) If an old provincial law would be invalid under the new law, the old provincial law ceases to have effect on the commencement date.

(3) Nothing in this Schedule prevents an old provincial law being invalidated by some other means.

Continuation of certain old local-level laws.

(1) Subject to Subsection (2), an old local-level law continues in force on and after the commencement date as if it had been made under the new law.

(2) If an old local-level law would be invalid under the new law, the old local-level law ceases to have effect on the commencement date, other than an old local-level law referred to in Subsection (3).

(3) If―

(a) an old local-level law imposed a community service tax, fee or charge immediately before the commencement date; and

(b) the amount of the tax, fee or charge was calculated having regard to the unimproved value of land or the value of a service that was provided by the relevant Local-level Government,

the old local-level law continues in force on and after the commencement date.

(4) Nothing in this Schedule prevents an old local level law being invalidated by some other means.

List of Amending Laws and Notes on Amendments

Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law (*1995), Certified on 2 February 1996
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 2) Law (No.22 of 1996), Certified on 18 September 1996
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No.23 of 1996), Certified on 18 September 1996
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No.8 of 1997), Certified on 18 June 1997
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 5) Law (No.31 of 1997), Certified on 19 January 1998
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 6) Law (No.28 of 1998), Certified on 22 October 1998
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No.29 of 1998), Certified on 22 October 1998
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 8) Law (*2003), Certified on 16 May 2003
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 9) Law (*2003), Certified on 27 October 2003
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No.10 of 2006), Certified on 30 January 2007
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 11) Law (No.11 of 2007), Certified on 14 February 2007
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law (*2008), Certified on 19 May 2011
Organic Law on Provincial Governments and Local-level Governments (District Development Authority) (Amendment) Law (*2014), Certified on 21 March 2014
Organic Law on Provincial Governments and Local-level Governments (Amendment No. 13) Law (*2014), Certified on 14 May 2014

15 Organic Law on National and Local-level Government Elections
(No.3 of 1997), Certified on 9 April 1997
(*Number not available)

^[1]Paragraph (b) of the Commencement Clause was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s1 and Organic Law on Provincial Governments and Local-level Governments (Amendment No. 5) Law (No. 31 of 1997).

²Paragraph (c) of the Commencement Clause was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s1.

³Section 1(2)(a)(i) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s1.

⁴ Section 1(3) was repealed and replaced by the Organic Law on Provincial Governments and Local- level Governments (Amendment No. 12) Law (2008), s6.

^[5] In Section 3(1) the definition of “assigned service delivery function or responsibility” and “service delivery entity” was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No.12) Law 2008, s7.

^[6] In Section 3(1) the definition of “District Development Authority” was added by the Organic Law on Provincial Governments and Local-level Governments (District Development Authority)(Amendment) Law 2014, s1.

^[7]In Section 3(1) the definition of "Interim Deputy Chairman" was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s2(a).

^[8]In Section 3(1) the definition of "Interim Deputy Governor" was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s2(b).

^[9]Section 3(1) (definition of "Provincial and Local-level Monitoring Authority") was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s58 and Schedule.

^[10]In Section 3(1) the definition of "urban Local-level Government" was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s2(c).

^[11]Section 5(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s2.

^[12]Section 9(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s3(a). Section 9(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s3(b). Section 9 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s3.

^[13]Section 10(3)(b) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s1.

^[14]Section 10(3)(c) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s4(a)(i). Section 10(3)(c) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s1.

^[15]Section 10(3)(d) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s4(a)(ii). Section 10(3)(d) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s4.

^[16]Section 10(3)(e) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s4(a)(iii). Section 10(3)(f) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s4(a)(iv).

^[17]Section 10(5) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s4(b).

^[18]Section 10(6) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s4(c).

^[19]Section 13(3)(b) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s5.

^[20]Section 13(3)(d) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s5.

^[21]Section 15(2) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s6.

^[22]Section 15(3) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s6.

^[23]Section 16 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s7.

^[24]Section 16A was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s8.

^[25]Section 18(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s2(a).

^[26]Section 18(3) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s9. Section 18(3) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s2(b).

^[27]Section 18(4) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s9. Section 18(4) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s2(b).

^[28] Section 18(5) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s2(b).

^[29]Section 19(1)(c) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s10.

^[30]Section 19(1)(d) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s10.

^[31]Section 19(1)(e) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s10.

^[32]Section 19(2) and (3) were repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s10.

^[33]Section 20 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s.11.

^[34]Section 21(3)(b) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s12.

^[35]Section 22 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s13.

^[36]Section 23(2)(b) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s14.

^[37]Section 23(2)(c) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s14.

^[38]Section 23(4) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s14.

^[39]Section 25 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s15.

^[40] Section 25(2)(b) was amended by the Organic Law on Provincial Governments and Local-level Governments (District Development Authority)(Amendment) Law 2014, s2.

^[41]Section 26(3) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s16.

^[42]Section 26(5) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s16.

^[43]Section 26(6) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s16.

^[44]Section 27(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s5(a).

^[45]Section 27(1A) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s5(b).

^[46]Section 27(4) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s5(c).

^[47]Section 27(7) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s17.

^[48]Section 29(1)(a) was amended by the Organic Law on National and Local-level Government Elections (No. 3 of 1997), s299(a)(i).

^[49]Section 29(1)(b) was amended by the Organic Law on National and Local-level Government Elections (No. 3 of 1997), s299(a)(ii).

^[50]Section 29(1)(c) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s.18

^[51]Section 29(1)(d) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s18.

^[52]Section 30(1) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s19.

^[53]Section 31 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s20.

^[54]Section 32 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s21.

^[55]Section 33 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No. 23 of 1996), s1.

^[56]Section 33A was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s22. Section 33A was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (District Development Authority)(Amendment) Law 2014, s3.

^[57]Section 33A(2)(b) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 2) Law (No. 22 of 1996).

^[58]Section 33A(2A) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No 29. of 1998), s1(a).

^[59] Section 33A(3)(f) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 11) Law (No. 11 of 2007).

⁶⁰Section 33A(5) and (6) were repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 2) Law (No. 22 of 1996).

⁶¹Section 33A(5) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No 29. of 1998), s1(b). Section 33A(6) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No 29. of 1998), s1(c).

^[62]Section 33A(7) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 2) Law (No. 22 of 1996).

^[63]Section 34(1) was repealed and replaced by the Organic Law on National and Local-level Government Elections (No. 3 of 1997), s299(b).

^[64]Section 35 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s23.

^[65]Section 37 was amended by the Organic Law on National and Local-level Government Elections (No. 3 of 1997), s299(c).

^[66]Section 40 (heading) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s24.

^[67]Section 40(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s24.

^[68]Section 40(1)(a) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s24.

^[69]Section 41 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s25.

^[70]Section 42(2) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s26.

^[71]Section 42(3) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s26.

^[72]Section 42(4) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s26.

^[73] Subdivision B of Part III.3 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No.12) Law 2008, s8. Section 43 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s27.

^[74]Section 44(2) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s28.

^[75]Section 44(3) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s28.

^[76] Subdivision B of Part III.4 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No.12) Law 2008, s9. Section 45 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s29.

^[77] Section 50 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No.12) Law 2008, s10. Section 50 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s30.

^[78]Section 61(2)(e) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s31.

^[79]Section 67 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s32.

^[80]Section 67A was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s33.

^[81] The Heading to Part IV was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s12.

^[82]Section 72(2)(a)(iii) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s58 and Schedule.

^[83]Section 72(2)(a)(iv) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s3. Section 72(2)(a)(iv) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (District Development Authority)(Amendment) Law 2014, s4.

⁸⁴Section 73(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s34.

^[85] Section 73(2) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 8) Law 2003, s1(a). Section 73(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment)(No. 13) Law 2014.

^[86] Sections 73(2A), (2B) and (2C) were added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 8) Law 2003, s1(b). Sections 73(2A), (2B) and (2C) were amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment)(No. 13) Law 2014.

^[87]Section 73(3) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No. 23 of 1996), s2. Section 73(3) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment)(No. 13) Law 2014.

^[88]Section 73(5) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s6.

^[89]Section 74(1)(d) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[90]Section 74(1)(e) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[91]Section 74(1)(g) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[92]Section 74(1)(h) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[93]Section 74(1)(i) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[94]Section 74(1)(j) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[95]Section 74(2)(e) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s58 and Schedule.

^[96]Section 74(2)(f) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[97]Section 74(2)(g) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[98]Section 74(2)(h) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[99]Section 74(3)(a) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s35.

^[100] Section 74(3)(c) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 10) Law (No. 10 of 2006), s4. Section 74(3)(c) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (District Development Authority)(Amendment) Law 2014, s5.

^[101]Section 79 (heading) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s36.

^[102] Section 80 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s11.

^[103]Section 81 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s37.

^[104] Division 2 of Part IV was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s13.

^[105] Section 82(b) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s1.

^[106] Division 2A of Part IV was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s14.

^[107] Section 83 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s15.

^[108]Section 84(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s38.

^[109] Section 85(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s7. Sections 85 and 86 were amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 9) Law 2003, s1 and s2. Subdivision B of Part IV.3 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s16.

^[110] Section 89 was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s17.

^[111] Section 90 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s18.

^[112] Sections 91, 92, 93, 94, 95, 96 and 97 were repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s2.

^[113]Section 91 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s39. Section 92(1)(c) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s40. Section 97 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s41.

^[114]Section 95A added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No. 23 of 1996), s3.

^[115]Section 95A(1) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No. 29 of 1998), s2(a).

^[116]Section 95A(4) added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No. 29 of 1998), s2(b).

^[117]Section 95A(5) added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No. 29 of 1998), s2(b).

^[118]Section 95A(6) added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No. 29 of 1998), s2(b).

^[119]Section 95A(7) added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No. 29 of 1998), s2(b).

^[120]Section 95B was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 7) Law (No. 29 of 1998), s3.

^[121] Section 95C was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s3.

^[122]Section 98(2)(b) amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s42.

^[123]Section 98(3) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s42.

^[124]Section 98(4) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s42.

^[125]Section 98(5) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s.42

^[126]The heading to Subdivision IV.3.K was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No. 23 of 1996), s4.

^[127]Section 105A added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No. 23 of 1996), s5.

^[128] Sections 105A(2) and (3) were repealed by the Organic Law on Provincial Governments and Local-level Governments (District Development Authority)(Amendment) Law 2014, s6.

^[129]Subdivision IV.3.L was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s43.

^[130]Section 106(3) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s9.

^[131]Section 110(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s44.

^[132]Section 110(5) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s44.

^[133]Section 112(3) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s45.

^[134]Section 114(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s46.

^[135] Section 116(2) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s19.

^[136] Sections 117(2), (7), (8) and (11) were repealed and replaced by Sections 117(11) and (12) by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s20. Section 117(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s47.

^[137]Section 119(1) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s48.

^[138]Section 121 (definition of "interim period") was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s49.

^[139]Section 125(1)(b) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s50.

^[140]Section 125(1)(ba) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s50.

^[141]Section 125(2)(a) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s50.

^[142]Section 125(5) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s50.

^[143]Section 125(5A) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s50.

^[144]Section 125(10) was repealed by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s50.

^[145]Section 128(1) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s51.

^[146]Section 128(3) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s51.

^[147]Section 128A was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s52.

^[148]Section 128B was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s52.

^[149]Section 129(2) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s53.

^[150]Section 130 (heading) was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s54.

^[151]Section 130(2) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s54.

^[152]Section 131(3) was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s55. Section 131(3) was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 4) Law (No. 8 of 1997), s10.

^[153]Section 136A was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s56.

^[154] Section 140(1A) was inserted by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s21.

^[155]Section 141 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law (No. 23 of 1996), s6.

^[156] Section 141 was repealed and replaced by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s22.

^[157] Schedules 1, 2, 3, 4, 5 and 6 were repealed and replaced by a new Schedule 1 by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law 2008, s4. Schedule 1 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 1) Law 1995, s57. Schedule 1.1 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 3) Law, No. 23 of 1996, s7. Schedule 1.1 was amended by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 6) Law, No.28 of 1998.

^[158] Schedule 2 was added by the Organic Law on Provincial Governments and Local-level Governments (Amendment No. 12) Law, No. 2008, s23.

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