Bill 365.

Summary.

The bill seeks to strengthen municipal institutions through the orderly transfer of resources and powers under the District Development Strategic Plan. Its objectives include directing investment in accordance with that plan, improving the use of public resources, encouraging municipal and mixed enterprises and public-private partnerships, and managing transfers from the Executive Branch (Órgano Ejecutivo) transparently. To that end, it amends Law 37 of 2009.

The amendment to Article 4 of that law defines fiscal and territorial management instruments. It distinguishes the Government Strategic Plan, which is prepared exclusively by the Executive Branch and is referred to in Law 34 of 2008; the Provincial Strategic Plan; the District Development Strategic Plan, prepared by the municipality; and the Local Corregimiento Development Strategic Plan, prepared by Community Boards (Juntas Comunales) with the participation of Local Development Boards (Juntas de Desarrollo Local). It also defines provincial investment programs, operating plans, and budgets, and distinguishes basic public services from nonstrategic services.

For decentralization purposes, it designates Guna Yala, Madugandí, Wargandí, Naso Tjer Di, and Puerto Obaldía as special territories. The amended article also defines an intermunicipal solidarity formula for municipalities whose gross allocation is less than 500,000 balboas. It specifies the basic allocated amount, linked to the district’s property tax revenue; the population-based allocated amount, calculated using the latest census; and the concepts of gross allocation, total surplus, and total differential. The amendment to Article 13 makes coordination among national, provincial, and municipal institutions mandatory in territorial planning and establishes a hierarchy of planning instruments, from the Government Strategic Plan to the local corregimiento plan.

When differences arise between a central government entity and a municipality concerning a delegated power, the National Decentralization Authority would serve as the body responsible for resolving them. The bill repeals two chapters of Law 37 of 2009 containing Articles 18-A through 18-H. It then establishes the National Decentralization Authority as an autonomous administrative entity with its own budget and responsibility for the decentralization process and local development.

The functions added to the Authority include preparing the national policy for approval by the Cabinet Council (Consejo de Gabinete), accrediting municipalities before powers are transferred, presenting a five-year plan, and coordinating transfers and training. It would also administer the Municipal Training and Education Institute (Instituto para la Capacitación y Formación Municipal), oversee funds and projects, coordinate property tax transfers with the General Treasury Directorate (Dirección General de Tesorería) of the Ministry of Economy and Finance (Ministerio de Economía y Finanzas), and request fund-use manuals from the Office of the Comptroller General of the Republic (Contraloría General de la República). It would submit an annual report to the Ministry of the Presidency (Ministerio de la Presidencia) and regulate mechanisms for citizen participation.

The amendment to Article 21 establishes a Board of Directors comprising representatives of ministries, the National Assembly (Asamblea Nacional), municipal and Indigenous organizations, and organized civil society; the comptroller and the person serving as secretary may participate and speak. The added articles assign the Authority responsibility for issuing calls to select civil society representatives and require the organization to be legally constituted, the candidate to be Panamanian, and the nomination to comply with the organization’s bylaws. The public entities concerned include the various levels of government and the ministries and oversight bodies cited; the provisions may be relevant to municipalities, community organizations, Indigenous peoples, municipal and mixed enterprises, and participants in public-private partnerships.