The following issues are scheduled for discussion at the Government meeting on March 10, 2009
1. Introducing amendments to the Budget Code and certain legislative acts of the Russian Federation
The federal law On Introducing Amendments to the Budget Code and Certain Legislative Acts of the Russian Federation was drafted with a view to specifying the rules of the Budget Code and federal laws to make the federal budget more balanced when formed, approved and executed amid uncertain prospects for the completion of the financial crisis, in the current economic situation, and with a federal budget deficit forecast for 2009-2011.
In addition, the draft law provides for amendments to increase the effectiveness of interbudgetary relations and improve the budgetary process in conditions of financial instability.
In this context, it is proposed to modify some rules of the Budget Code in the years 2009 to2012 and amend certain legislative acts.
Using the Reserve Fund to finance the federal budget deficit
In view of a federal budget deficit forecast for 2009-2011 due to a considerable fall in revenues, it will be required to provide legal grounds for amending the Federal Law On the Federal Budget for 2009 and the Planning Period of 2010 and 2011 and for drafting the federal law On the Federal Budget for 2010 and the Planning Period of 2011 and 2012. For these purposes it is necessary to update certain provisions of the Budget Code.
The draft law stipulates the suspension of paragraph 1 of Article 969 of the Budget Code until January 1, 2013, in the part concerned with the Reserve Fund and paragraph 4 of the same article, in accordance with which the Reserve Fund can be used only to subsidise an oil and gas transfer in the event of inadequate oil and gas revenues.
In this context, the amendment proposed by the draft law says that the Reserve Fund can be used in the years 2010 to2012 to balance out the federal budget in volumes approved by the federal law on the federal budget.
It is further proposed to amend Federal Law No. 63-FZ of April 26, 2007 On Introducing Amendments to the Budget Code of the Russian Federation in the Part Concerned with the Budgetary Process and Agreeing Certain Acts of the Russian Federation with the Budget Legislation of the Russian Federation. According to this amendment, paragraph 2 of Article 967 of the Budget Code, which sets a ceiling on the deficit of the federal budget other than from oil and gas as a percentage of GDP (not more than 4.7% of the domestic product forecast for the appropriate fiscal year), will not be put into effect until January 1, 2013.
These amendments will keep intact the basic principles of using oil and gas revenues of the federal budget and will make the use of the Reserve Fund more flexible.
Possibility to change budget indicators for the current fiscal year only
In the current economic situation, with federal budget revenues other than from oil and gas likely to fall sharply, the draft law provides for more amendments to Budget Code rules regulating the procedure for amending the federal law on the federal budget. According to these amendments, in the event of a more than 15% reduction in budget revenues other than from oil and gas in the current fiscal year compared with the revenues approved by the federal law on the federal budget, changes can be made only to the indicators of the current fiscal year, without changing planning period figures. Moreover, provisions of the federal law on the federal budget related to the planning period may be deemed invalidated by adopting a special federal law (without giving an updated forecast of social and economic development in the planning period when submitting the draft law).
In addition, in the above case, when introducing amendments to the federal laws on the budgets of state non-budgetary funds of the Russian Federation, provisions of these federal laws relating to the planning period may also be deemed invalidated.
In 2009 (as estimated by the Ministry of Economic Development), revenues other than from oil and gas, following an update of the budget forecast, will drop by 25%.
In the previous years, revenues other than from oil and gas were rising faster than energy prices. They exceeded prices by 15% in 2008, by 23% in 2007 and by 9% in 2006. The same slump can be expected if oil prices plunge without the signs of an economic crisis.. Therefore, the threshold of the norm proposed by the draft law must be no less than 15%.
Giving greater subsidies from regional budgets to balance out local budgets
As a stopgap anti-crisis measure aimed at balancing out local budgets, the draft law proposes a rule according to which, in the years 2009 to -2012, the limit set by Article 1391 of the Budget Code on other interbudgetary transfers from regional budgets to local budgets as 10% of the overall interbudgetary transfer to local budgets from regional budgets may be exceeded within the limits of subsidies granted to balance out local budgets.
The lifting of this restriction will open the way for additional financial assistance to local budgets from regional budgets.
Finding additional revenue sources
With a view to balancing out the federal budget, the draft law proposes amending federal laws No. 185-FZ of July 21, 2007 On the Housing and Communal Reform Fund and No. 139-FZ of July 19, 2007 On the Russian Nanotechnology Corporation. These amendments provide for the return to the federal budget of subsidies granted as a property contribution by the Russian Federation to the state-owned corporations Housing and Communal Reform Fund and Russian Nanotechnology Corporation in accordance with a Government decision. .
In fulfilment of the budget message On Budgetary Policy in 2007 delivered by the President to the Federal Assembly, the draft law contains amendments to the Customs Code, aimed at transferring customs payments directly to the federal budget, omitting intermediate accounts of customs authorities. This will speed up their possible use to finance federal budget spending.
In addition, the draft law permits customs payments to be made exclusively in the Russian currency. These provisions will not affect the rights of foreign trade participants.
The adoption of the draft law will make available to the federal budget 100 billion roubles currently held in accounts receiving customs and other payments from foreign trade participants.
Altering the procedure for examining and approving the federal law on the federal budget
The draft law includes an amendment according to which the fulfilment of the requirement in Article 192 of the Budget Code to include among materials submitted simultaneously with the draft federal law on the federal budget to the State Duma a register of spending obligations to be met out of the federal budget, as well as a report on the implementation of special long-term programmes and the federal target investment programme, will be suspended in 2009.
While considering that completion dates for a large number of approved special federal programmes fall beyond the year 2012, it is proposed to add a rule to Article 205 of the Budget Code, according to which the subject matter of the consideration of the draft federal law on the federal budget during a second reading will be a supplement on long-term special (federal) programmes.
2. Draft federal law On Invalidating Paragraph 2 of Article 42 of the Federal Law on Narcotic Drugs and Psychotropic Substances
The draft federal law proposes invalidating paragraph 2 of Article 42 of Federal Law No. 3-FZ of January 8, 1998 On Narcotic Drugs and Psychotropic Substances, according to which a federal extra-budgetary fund is set up to finance additional measures to deal with illegal trafficking in narcotics, psychotropic substances and their precursors, with this fund being established in accordance with the legislation of the Russian Federation.
The directive to set up the Fund was issued to the Government in subparagraph three of paragraph 1 of Presidential Executive Order No. 343-rp of September 17, 1998.
The Fund was established and the Regulations on it approved by Government Resolution No. 544 of May 20, 1999 On a Federal Extra-Budgetary Fund to Counter Illegal Trafficking in Narcotic Drugs, Psychotropic Substances and their Abuse.
But the Fund contradicts Article 144 of the Budget Code, which giving an exhaustive list of state non-budgetary funds does not include the Fund concerned.
In addition, Government Resolution No. 156 of March 7, 2008 On Invalidating Certain Acts of the Government of the Russian Federation invalidated the act concerning the government commission to counter the abuse of narcotic drugs and their illegal trafficking, one of whose functions was to implement decisions on the Fund's management.
3. Introducing amendments to certain acts of the Russian Government
The Ministry of Justice drafted a Government resolution On Introducing Amendments to Certain Acts of the Russian Government with a View to Assessing Drafts of Normative Legal Acts and Other Documents for Provisions Conducive to Manifestations of Corruption.
The draft resolution proposes amending a number of Government resolutions, giving the Ministry of Justice authority to examine with experts' participation the draft of federal laws and acts of the President and the Government for provisions conducive to manifestations of corruption.
The resolution was drafted with due account taken of proposals made by all federal bodies of executive authority administered by the President and the Government, as well as proposals made by public organisations.
4. Introducing amendments to the Regulations on the Ministry of Education and Science
The draft Government resolution On Introducing Amendments to the Regulations on the Ministry of Education and Science specifies certain powers of the Ministry and formalises the Ministry's new powers given to it by a number of federal laws.
The draft proposes introducing amendments to the Regulations as approved by Government Resolution No. 280 of June 15, 2004.
In pursuance of subparagraph (b) of paragraph 3 of Article 1, and subparagraphs (d) and (f) of paragraph 3 of Article 2 of Federal Law No. 232-FZ of October 24, 2007 On Introducing Amendments to Certain Legislative Acts of the Russian Federation (in the Part Concerned with Establishing Levels of Higher Professional Education), the Regulations will be amended to formalise the Ministry's powers to approve selection of federal state institutions of higher professional education to train at preparatory courses individuals who have served under contract no less than three years in the Armed Forces, other troops, military formations and bodies in military positions and were discharged from military service to sit entrance examinations at federal budget expense; as well as to determine ways of obtaining a higher professional education under shortened or accelerated bachelor-degree curricula by persons who have a secondary professional education of the respective profile, and persons whose level of education or abilities warrant their obtaining of a higher professional education under shortened or accelerated bachelor-degree curricula.
In pursuance of subparagraph 8 of Article 2 of Federal Law No. 258-FZ of December 29, 2006 On Introducing Amendments to Certain Legislative Acts of the Russian Federation in Connection with the Improved Delimitation of Powers, the Regulations will be supplemented with the following new powers:
• to adopt normative legal acts regulating the exercise by bodies of state authority in the regions of federal powers transferred to them;
• to agree appointments of heads of regional executive bodies exercising federal powers transferred to them;
• to draft and submit to the Government, in the cases established by federal laws, proposals on divesting regional bodies of state authority of federal powers transferred to them;
• to designate special criteria characterising the performance of regional bodies of state authority exercising federal powers transferred to them.
At the same time, the Regulations establish the Ministry's powers provided for in Presidential Decree No. 1325 of November 14, 2002 On Approving the Regulations on the Procedure for Examining Issues of Citizenship of the Russian Federation:
• to approve the form of and the procedure for issue of a certificate on passing a state Russian language test by foreign nationals when acceding to the citizenship of the Russian Federation;
• to permit educational institutions (organisations) on the territory of the Russian Federation or abroad to conduct a state test of nationals of other countries in Russian as a foreign language.
5. The Federal Service for Supervision of Communications, Information Technology and Mass Communications
In conjunction with Presidential Decree No. 1715 of December 3, 2008 On Certain Aspects of State Administration of Communications, Information Technology and Mass Communications, a Government resolution was drafted On the Federal Service for Supervision of Communications, Information Technology and Mass Communications.
The draft resolution approves the Regulations on the Federal Service for Supervision of Communications, Information Technology and Mass Communications.
The Regulations formalise the powers of the reorganised Federal Service for Supervision of Communications and Mass Communications and add several new powers, namely:
1. power to exercise state monitoring and supervision of:
requirements set to the use of public information and telecommunications networks;
requirements set to the protection of information in public communications networks;
requirements set by the legislation of the Russian Federation to state registration of information systems and resources;
requirements set to mandatory certification or declaration of conformity of information technologies designed to handle a state bank of data on children left without parental care.
2. power to organise state registration of information resources and systems.
3. power to exercise state monitoring and supervision of the submission of a compulsory federal copy of documents in the specified sphere of activity of the Service.
4. power to exercise licensing, including monitoring of the observance by licensees of licensed conditions and requirements, of activities to manufacture copies of audiovisual works, software for electronic computers, databases and sound recordings on any type of carrier (except when such activity is performed alone by persons entitled to use the indicated objects of copyright and related rights by virtue of a federal law or a contract) in accordance with the legislation of the Russian Federation.
5. power to keep a register of operators processing personal data.
6. power to organise seasonal scheduling and international coordination of seasonal timetables of the radio broadcasting service in HF wavebands.
7. power to issue permits for the design, construction, upgrading, and dismantling of overland communications lines crossing the state border of the Russian Federation or near-border territory.
6. Introducing amendments to the Regulations on the Federal Communications Agency
The Ministry of Telecommunications and Mass Communications, to bring the Regulations on the Federal Communications Agency approved by Government Resolution No. 320 of June 30, 2004, in line with the provisions of Federal Law No. 176-FZ of July 17, 1999 On Postal Communications in the part concerned with the exclusion of the Federal Communications Agency's powers to compensate postal operators for losses caused as a result of rendering universal postal services, submitted a draft Government resolution On Introducing Amendments to Government Resolution No. 320 of June 30, 2004.
In accordance with Article 2 of the Federal Law On Postal Communications, "universal postal services are postal services rendered to satisfy the needs of postal service users in the exchange of written correspondence within the territory of the Russian Federation at affordable prices."
Previously, Article 29 of the Federal Law On Postal Communications specified that expenses incurred by federal postal communications in rendering universal postal services and exceeding receipts for services rendered at state regulated rates shall be indemnified by the federal budget. Federal Law No. 122-FZ of August 22, 2004 On Introducing Amendments to Legislative Acts of the Russian Federation and Invalidating Certain Acts of the Russian Federation following Adoption of Federal Laws On Introducing Amendments and Additions to Federal Law On Basic Principles of Organisation of Legislative (Representative) and Executive Bodies of State Authority in the Regions of the Russian Federation and On Basic Principles of Organisation of Local Government in the Russian Federation (Article 124), amended Article 29 of the Federal Law On Postal Communications and invalidated this provision.
Currently, there are no legal grounds for the State to compensate postal operators for losses caused as a result of rendering universal postal services.
7. Signing the Agreement between the Government of the Russian Federation and the Interstate Foundation for Humanitarian Cooperation between Members of the Commonwealth of Independent States on the Conditions of its Stay on Russian Territory
The Interstate Foundation for Humanitarian Cooperation between Members of the Commonwealth of Independent States was set up under a May 25, 2006 Treaty and is an international organisation.
Moscow was assigned as the seat of the Foundation and its Executive Directorate.
To create proper conditions for the Foundation's activities on Russian soil, its Executive Directorate drafted in October 2007 an agreement between the Government of the Russian Federation and the Foundation on conditions of its stay on Russian territory.
The draft contains rules other than those stipulated by Russian legislation in the part concerned with granting privileges and immunities to the Foundation, representatives of Foundation member countries and its staff on Russian territory. In this context, the Agreement following its signing in the submitted form will be subject to ratification pursuant to subparagraph (a) of paragraph 1 of Article 15 of the Federal Law On International Treaties of the Russian Federation.
8. Assigning budget allocations to the Government of the Republic of Sakha (Yakutia) from the Russian Government's disaster relief fund and issuing state housing certificates to the Government of the Republic of Sakha (Yakutia) for distribution among those rendered homeless by the floods that occurred in the Republic of Sakha (Yakutia) in the spring and summer of 2008
The floods that occurred in the spring and summer of 2008 in the Republic of Sakha (Yakutia) inflicted considerable damage on the population, housing, utilities and social amenities.
Total material damage caused by the natural disaster was estimated by the Government of the Republic at 900 million roubles. However, no money was allocated for relief efforts from the republic or local budgets for lack of freely available funds in them.
Having examined the supporting documents submitted by the Government of the Republic of Sakha, experts determined the sum required from the Russian Government's disaster relief fund at 33,446,600 roubles to render financial assistance to the population for partly lost property (795 families were allocated 50,000 roubles each) and 127 state housing certificates, with later redemption with appropriations from the fund concerned, to be distributed among flood victims (492 people) who lived in 109 households which the Ministry of Regional Development deemed unfit for habitation.
In Resolution No. 2020-r of December 29, 2008 the Russian Government allocated 195,761,500 roubles for the Government of the Republic in the first quarter of 2009 to make lump sum payments to flood victims and also to conduct salvage, rescue and accident recovery work to eliminate negative post-disaster effects.
On the basis of the above Government Resolution, the negative post-disaster effects in the Republic of Sakha (Yakutia) will be eliminated completely.
9. Assigning budget allocations to the Government of the Stavropol Territory from the Russian Government's disaster relief fund
Heavy showers with hail and strong winds, which hit the Stavropol Territory in August 2008, affected housing, utilities and social amenities in the area.
Total material damage from the natural disaster was estimated by the Government of the Stavropol Territory at 51 million roubles. The Government of the Stavropol Territory said it had earmarked 7.5 million roubles of own funds to cope with the consequences of the disaster.
Having examined the supporting documents submitted by the Government of the Stavropol Territory, experts determined the sum required for the Government of the Stavropol Territory from the Russian Government's disaster relief fund at 33,332,800 roubles, including 21,677,800 in lump sum payments to disaster victims (8,301 people received up to 5,000 roubles each) and 11,655,000 roubles to finance required accident recovery work to restore damaged housing, utilities, social amenities and farming units.
* Press releases by the Department of Press Service and Information contain the materials submitted by the federal executive bodies for discussion by the Presidium of the Government of the Russian Federation.