Chapter – XVIII) Punjab Local Government Finance Commission

Chapter – XVIII) Punjab Local Government Finance Commission #

83.       Local Government Finance Commission.– #

(1) The Government shall constitute the Punjab Local Government Finance Commission to perform functions under this Act.

(2)       The Finance Commission shall comprise of members including the Chairperson as under:

(a)        Minister in charge of Finance Department of the Government, who shall also be the Chairperson of the Finance Commission;

(b)       Minister in charge of the Department, who shall be the co-Chairperson of the Finance Commission;

(c)        Four members of the Provincial Assembly of the Punjab, out of whom two shall be appointed by the leader of the house and the other two by the leader of the opposition in the Assembly;

(d)       Secretary to the Government, Finance Department, who shall also be the Secretary of the Finance Commission;

(e)        Secretary of the Department;

(f)        Secretary to the Government, Planning and Development Department;

(g)       four experts including one woman, on local governments and local government finance appointed in terms of section 86 of this Act; and

(h)       four Heads of the local governments to be nominated by the Chief Minister.

(3)       In case of absence of the chairperson for any reason, the co-chairperson shall chair the Finance Commission and in case he is also absent, the present members shall elect one of them to chair the Finance Commission for the duration of his absence.

(4)       The Finance Commission may co-opt any other person for advice in relation to a particular matter under its consideration; however, the co-opted member shall have no right of vote.

(5)       No proceedings or act of the Finance Commission shall be invalid merely on ground of existence of a vacancy or defect in composition of the Finance Commission.

(6)       The members of the Finance Commission shall be paid such remuneration and other allowances as the Government may determine from time to time.

(7)       The remuneration and other allowances of a member of the Finance Commission shall not be varied to his disadvantage during his term in office.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
111	174	83	92	83

84.       Term of office and premature removal of certain members.– #

(1) The Ministers and Secretaries referred to in section 83 of this Act shall be ex-officio members of the Finance Commission.

(2)       A Head of the local government referred to in section 83 of this Act shall hold the office of member of Finance Commission for four years from the date of assumption of office.

(3)       An expert member referred to in section 83 of this Act shall hold office for four years from the date of assumption of office.

(4)       The Chief Minister may, after due notice and inquiry in the prescribed manner, remove any member of the Finance Commission, not being the member referred to in subsection (1), during the tenure of his office on ground of inefficiency, misconduct, misuse of office or inability to perform functions on account of bad health or physical or mental incapacity.

(5)       Any member of the Finance Commission, not being the member referred to in subsection (1), may resign from his office by writing under his hand to the Chairperson of the Commission.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	175	84	93	84

85.       Casual vacancies.– #

(1) Where the position of a member, not being the Minister or a Secretary to the Government, becomes vacant on account of his resignation, removal, death or for any other cause, the Government shall appoint a person to fill this vacancy in the same manner as was applicable for the selection of that member.

(2)       A person appointed under subsection (1) shall hold office for the remainder of the term of office of the member to whom he replaces.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	176	85	94	85

86.       Eligibility for appointment as an expert member.– #

(1) A person shall be eligible for appointment as an expert member under section 83 of this Act if:

(a)        he has at least sixteen years education in a discipline related to the functions of the Finance Commission, possesses adequate knowledge of economics, public finance, accounts, or working of the local governments in general with at least fifteen-year experience in the aforesaid or any other related affairs;

(b)       he is, for the time being, qualified to be a candidate for an election under this Act;

(c)        he is not in the service of Pakistan or any office or body which is set up, or owned or controlled by the Government, or a local government in the Punjab, or in which the Government or a local government has a controlling share or interest or otherwise holds any office of profit in the Government;

(2)       Subject to the provisions of subsection (4), a person who has previously remained as an expert member shall be eligible for re-appointment as a member of the Finance Commission.

(3)       No Head of the local government shall be eligible for appointment as a member of the Finance Commission if he has previously remained its member as a Head of the local government during the preceding four calendar years.

(4)       An expert member or a Head of the local government who has previously been removed from the office of a member of the Finance Commission under subsection (4) of section 84 of this Act shall not be eligible for appointment as a member of the Finance Commission subsequently.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	177	86	95	86

RELEVANT RULES
1.	Punjab Finance Commission (Terms & Conditions of Professional Members) Rules, 2016.

87.       Oath of office of members of Finance Commission.– #

Before entering upon office, every member of the Finance Commission shall make an oath in the form set out in the Fourth Schedule before Governor of the Punjab.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	179	87	96	87

88.       General functions of the Finance Commission.– #

(1) In addition to any other work assigned to it under this Act or any other law for the time being in force, the Finance Commission shall:

(a)        establish formulae for determining the size of provincial allocable amount and the share of local governments from this amount;

(b)       oversee and report upon the transfer of share of local governments from the provincial allocable amount in accordance with the formulae referred to in clause (a);

(c)        advise the Government or a local government on matters relating to fiscal transfers to and fiscal performance of local governments;

(d)       advise the Government or a local government on specific matters, objections or claims in relation to fiscal transfers;

(e)        support local governments in effecting improvements in their fiscal capacity and performance, better budget management and increased adherence to financial and procurement laws;

(f)        fix an enhanced incidence of a local tax, fee, rate, toll, rent or other charge of a local government if it is under fiscal distress;

(g)       recommend the schedule, nature and structure of independent audits of the local governments;

(h)       monitor fiscal health of local governments on an annual basis in particular their fiscal effort and performance; their ability to meet budgetary and development targets, their debt management and to make a determination of fiscal distress defined in terms of the ability of a local government to balance their budgets by ensuring that the sum of estimated net revenues and appropriated fund balances are sufficient to cover appropriations and other liabilities including pension and general provident fund liabilities;

(i)        during the first month of each financial year, present to the Government and all local governments in the Punjab an annual report on fiscal performance of local governments during the previous financial year which shall, among other things, include an analysis of the matters referred to in this subsection and fiscal transfers made to the local governments and own resources raised by them and their performance in meeting budgetary and performance objectives.

(2)       The report referred to in clause (h) and (i) of subsection (1) shall be laid before the Provincial Assembly.

(3)       The Finance Commission shall not be subject to or take cognizance of the directions of any person as to the manner in which it shall discharge its duties.

(4)       The Secretary shall, during the exercise of its powers under this Act, shall have regard to the recommendations, reports and advice of the Finance Commission in relation to the matters mentioned under subsection (1).

Explanation:

For the purpose of this section, the term fiscal stress shall mean the condition under which a local government is unable to generate sufficient receipts within the period under question to meet its expenditure and other liabilities.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
112	180	88	97	88

89.       Right of local governments to refer objections to Finance Commission.– #

(1) Where a local government has any objection on the sums to be transferred or likely to be transferred to it or to any other local government from provincial allocable amount under this Act, that local government may make a reference to the Finance Commission.

(2)       Every reference under subsection (1) shall be made in writing and contain grounds of objection.

(3)       The Finance Commission shall, after due notice and inquiry, decide every reference made to it under this section in not more than sixty days.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	181	89	98	89

90.       Procedure of Finance Commission.– #

(1) The Finance Commission shall, subject to this Act and the rules, regulate its own procedure.

(2)       All decisions of the Finance Commission shall be made through a simple majority of votes of the members present and voting on one member one vote basis.

(3)       The quorum necessary for transaction of business at an ordinary or special meeting of the Finance Commission shall be one-half of the members holding office at the time out of whom not less than two shall be the expert members.

(4)       All meetings of the Finance Commission shall be public unless the members present, by a simple majority vote, decide to exclude public from the whole or part of the proceedings on the ground that public information of the proceedings of its meeting shall be prejudicial to public interest by reason of the confidential nature of business to be transacted at that meeting or for such other special reasons as may arise from the nature of business to be transacted or the proceedings at the meeting.

(5)       The Finance Commission shall exercise the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (V of 1908) with regards to summoning and enforcing the attendance of any person and compelling the production of documents and records for the purposes of this Act.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	182	90	99	90

91.       Duty of local governments and other public entities etc. to cooperate with Finance Commission.– #

(1) The Finance Commission may require the Government, a local government, an agency owned or managed by the Government or a local government, or any other person or authority in the Punjab to render assistance to it or to provide all information which it reasonably requires for the purposes of this Act.

(2)       It shall be the duty of the Government and all such local governments, public entities, or other persons and authorities to render assistance or to provide information as is required by the Finance Commission under subsection (1).

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	183	91	100	91

92.       Secretariat of the Finance Commission.– #

(1) The Finance Commission shall have a secretariat comprising such number of officers and staff as the Government may from time to time determine

(2)       There shall be a separate budget for the Finance Commission in the annual budget of the Punjab.

(3)       The secretariat of the Finance Commission shall be headed by the Secretary to the Government, Finance Department who shall also be the Principal Accounting Officer of the Finance Commission.

NOTES:
PARI MATERIA PROVISIONS
PLGA 2013	PLGA 2019	PLGO 2021	PLGA 2022 (Act No. XIII of 2022)	PLGA 2022 (Act No. XXXIII of 2022)
s.	s.	s.	s.	s.
–	184	92	101	92

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