REPUBLIC OF LITHUANIA                                     
                               LAW                                              
                               ON                                               
                      LOCAL SELF-GOVERNMENT                                     
                                                                                
                            Chapter 1                                           
                       GENERAL PROVISIONS                                       
                                                                                
                                                                                
                                                                                
     Article 1. The Concept of Local Self-Government and the                    
               Purpose of the Law                                               
     Local self-government (hereinafter referred to as self-                    
government")  denotes   the  right   and  actual   power  of  the               
institutions of a local government which is elected by the                      
residents of an  administrative unit  of  the  territory  of  the               
Republic of  Lithuania, to  freely and independently on their own               
responsibility regulate  and manage  public affairs  and meet the               
needs of  local residents  according to the Constitution and laws               
of the Republic of Lithuania.                                                   
     The municipality  shall be  an administrative  unit  of  the               
territory of the  State, the  community of residents  whereof has               
the right to self-government guaranteed by  the State.                          
The community  of the  municipality  population  shall  be    the               
residents  of the actual municipality, who  are   connected  with               
the legal relations of self-government.      The legal  relations               
of  self-government shall be  regulated by the Constitution, this               
and other laws of the  Republic of Lithuania, and statutes of the               
councils. This  Law shall establish the general procedure for the               
organization and activities of the self-government  institutions.               
     If other functions of state governing or administration  are               
delegated   to the local authority, or this is  necessary for the               
implementation  of  its  exclusive  status,  the  laws  may  also               
establish  a   different  procedure   for  the  organization  and               
activities of the institutions of the respective local authority.               
                                                                                
     Article 2. The Principles of Self-Government                               
     Self-government shall  be implemented  on the  basis of  the               
following principles:                                                           
     1) the coordination of the interests of the municipality and               
the State;                                                                      
     2) the direct participation of the citizens of the  Republic               
of   Lithuania residing   in the  respective  municipality in the               
election  to  the  municipal  council,  polls,  meetings  of  the               
residents and petitions;                                                        
     3) the  accountability of  self-government institutions  and               
their officers to the residents;                                                
     4) publicity and response to public opinion;                               
     5) lawfulness and social justice; and                                      
     6) economic independence.                                                  
                                                                                
     Article 3. Territorial Basis of Self-Government                            
     The right  to self-government  shall be  guaranteed  to  the               
administrative units  of the  State territory which are  provided               
by the Law.                                                                     
                                                                                
                            Chapter 2                                           
                                                                                
                  SELF-GOVERNMENT INSTITUTIONS,                                 
         PROCEDURE FOR THEIR ORGANIZATION AND ACTIVITIES                        
                                                                                
     Article 4. Self-Government Institutions                                    
     Self-government institutions shall  comprise  the  following               
institutions:                                                                   
     1) the  elective representative institution - the  municipal               
council (hereinafter referred to as "council");                                 
     2) executive  institutions -  the local  authority mayor  or               
the local  authority mayor  and the  municipal executive    board               
(formed by the decision of the council); and                                    
     3)  the   control  institution   -   the   local   authority               
controller.                                                                     
     The structure  of the  executive institutions,  specified in               
the second  item of  this Article, as chosen at the  beginning of               
the term  of office,  shall not  be changed  until the end of the               
term of office of the council.                                                  
     Within two  months from the day of convocation of the  first               
meeting of  the newly-elected  council the local  authority mayor               
and deputy  mayor must  be elected, self- government institutions               
formed, the  structure of  the  administration  as  well  as  the               
council statute approved.                                                       
     The powers  of the local authority institutions expire  when               
a newly  elected council  assembles at  the  first  meeting.  The               
mayor, board  and controller  shall resign  at the  first council               
meeting, and the council shall charge them to continue performing               
its functions until new  officers are elected or appointed in the               
established  procedure.                                                         
                                                                                
     Article 5. The Council                                                     
     Councillors shall be elected for a term of two years by  the               
respective municipality  residents - citizens of the  Republic of               
Lithuania, in secret voting on the basis of  universal, equal and               
direct suffrage  in the  procedure  established by the Law of the               
Republic of Lithuania on  Election to Municipal Councils.                       
     The municipal  council shall  implement the  right to  self-               
government and  shall possess  the  rights  of  a  legal  person.               
The council  shall form committees, commissions and  other organs               
provided by laws of the Republic of  Lithuania.                                 
     The  council  statute  shall  establish  the  structure  and               
procedure for activities of the council.                                        
     The powers  of the  council shall  be terminated  before the               
expiration of the term of office when direct rule is  temporarily               
introduced into the territory of the local authority.                           
                                                                                
     Article 6. Forms of the Activities of the Council                          
     The  procedure   for  the  work  of  the  council  shall  be               
established by  this Law  and the statute adopted by the council.               
A sitting  shall be  the main  form of activities of the council.               
The  council   shall  exercise  its  powers  by  considering  and               
resolving issues  at the sittings of the council,  committees and               
commissions, meetings  of factions and  groups. The council shall               
adopt decisions  on the  issues  under consideration and organize               
their implementation and  control.                                              
     The council   must at least once a year provide  information               
to the  residents concerning  the activities  of  the council and               
the institutions  formed  by  it,  shall  correct  the  indicated               
shortcomings of  its work, and  implement constructive proposals.               
The payment not received at the principal place of employment for               
the time  spent at  council sittings  shall  be paid and expenses               
incurred during  work in the council  shall be compensated to the               
councillors in the manner prescribed by the council.                            
                                                                                
     Article 7. Council Sittings                                                
     A  council   sitting  shall  be  considered  lawful  if  the               
majority of  the established  whole number  of  councillors    is               
present.                                                                        
     The first  sitting of  a  newly  elected  council  shall  be               
convened by  the chairman of the appropriate electoral  committee               
within two  weeks after  the elections.  Said  sitting  shall  be               
opened by  the chairperson  of the  electoral committee who shall               
preside over  the sitting   until  the mayor  is elected.  If the               
chairman  of   the     committee  does  not  convene  a  sitting,               
councillors shall   gather on their own on the next day after the               
expiration  of a two-week term.                                                 
     Subsequent council  sittings shall be convened by the  mayor               
and in  case of his absence - the deputy mayor on  the initiative               
thereof or  on the  proposal of the  committee, board, as well as               
on the  written demand  of at  least one-third of the established               
number of councillors, indicating the issues under consideration.               
The mayor,  deputy mayor must convene the sitting and present the               
proposed issues for consideration within two weeks of  receipt of               
the demand  of the councillors. If the sitting is not convened in               
due time,  it may  be   convened by at least one-third of all the               
councillors,   having informed  other councillors  and the  local               
residents  about this in writing. If the mayor or his deputy does               
not participate  in the  sitting, the  sitting shall  be presided               
over and all documents adopted at the sitting  shall be signed by               
one of the councillors.                                                         
     The mayor,  his deputy  or one-third  of  councillors  shall               
inform all  the  councillors  and  the  local  residents  of  the               
convocation of  a sitting  as well  as of the issues prepared for               
consideration at  least three  days prior to  the commencement of               
the sitting.                                                                    
     Issues to be considered by the council shall be submitted by               
committees, commissions,  councillors, mayor,  and the board. The               
mayor shall draw up the agenda of the  council sitting. It may be               
supplemented or  amended by  the   decision of  the council  upon               
proposal  of   the  committee   or  commission,  faction,  group,               
controller or a Government representative-at-large.                             
     Decisions of  the council  shall be  adopted by  a  majority               
vote of all the councillors participating in the sitting.  In the               
event of  a tie vote, the vote of the mayor shall  be decisive. A               
councillor shall  not have  the right to  vote if the property or               
financial issues  related to  his   person are  being considered.               
Decisions of  the council  shall become effective on the next day               
following their   promulgation,  unless a  further date  of their               
coming into  force is set forth in the decisions.                               
     Minutes shall be taken at council sittings. The mayor  shall               
sign the minutes and the council decisions.  Decisions concerning               
the election of the mayor shall be  signed by the chairman of the               
electoral committee or the  sitting.                                            
     Council sittings shall be convened at least once a  quarter.               
Council sittings  shall be  open to  the public.  The controller,               
board members,  a Government  representative-at-large, members of               
the Seimas  of the Republic of  Lithuania shall have the right to               
participate  and   speak  at  the  sittings.  The  procedure  for               
participating of  representatives  of  enterprises,  institutions               
and   organizations as  well as  residents  at  council  sittings               
shall be established by the council statute.                                    
     Only those  issues shall  be considered  at council sittings               
the draft  decisions  whereof  are  submitted  in  the  procedure               
established by the council statute.                                             
                                                                                
     Article 8. Council Committees                                              
     Council committees  shall be  the council  organs which  are               
formed   for   the  preliminary  consideration,  preparation, and               
submission of  issues to  the council,   mayor  and the board, as               
well as for controlling the observance of laws and implementation               
of  the   decisions  of   the  council,   mayor  and  the  board.               
Committees may consider issues which are within their  competence               
and adopt recommendatory decisions, which must  be considered  by               
self-government   institutions,  subdivisions of administrations,               
municipal enterprises   and organizations which have received the               
recommendations  or proposals.                                                  
     Committees  shall   also  submit   proposals  and   findings               
concerning decisions submitted to  the council for  consideration               
as well as other draft documents. Committees shall be formed from               
the councillors.  The   number of  committees as well as members,               
competence and  working procedure whereof shall be established by               
the  council statute. Committee chairmen shall be elected on  the               
recommendation of the mayor.                                                    
     Minutes shall  be taken  at  committee  sittings.  Committee               
chairmen shall sign the findings and decisions.                                 
                                                                                
     Article 9. The Mayor, Deputy Mayor                                         
     For the  term of  office, the  council shall, from among the               
councillors, elect  a mayor  and, on  the recommendation  of  the               
mayor, a  deputy mayor. The mayor, deputy mayor  shall be elected               
by secret  voting. The  mayor, deputy   mayor shall be considered               
elected provided  that the   majority  of   the established whole               
number  of the  councillors voted for their candidatures.                       
     The  mayor,  deputy  mayor  shall  be  responsible  for  and               
accountable to  the council  for exercising  the  powers  of  the               
autonomous competence.                                                          
     The mayor,  deputy mayor  shall be  directly responsible for               
exercising the  powers delegated  by the  State.  If  the  mayor,               
deputy mayor  fails to  exercise or  poorly exercises  the powers               
delegated by  the State, the Government shall  inform the council               
about this,  and shall  warn said   officers as well as establish               
the  term   for  elimination   of  the   short-comings.  If   the               
shortcomings are not eliminated  within the established time, the               
Government  shall  appeal  to  the  council  with  its  directive               
concerning  the   dismissal  of  the  mayor,  deputy  mayor.  The               
Government  appeal must be considered at a council sitting within               
two   weeks. If  the council  does not  dismiss the mayor, deputy               
mayor,  the  Government  shall  appeal  to  the  Seimas  for  the               
introduction of direct rule.                                                    
     The  powers  of  the  mayor,  deputy  mayor  shall  also  be               
terminated:                                                                     
     1) when  the ruling of the court on the crimes committed  by               
them is being enforced;                                                         
     2) when  they do  not resign  from  another  job  or  office               
according to paragraph 10 of this Article; and                                  
     3) when direct rule is being temporarily introduced into the               
local authority territory.                                                      
By the motivated decision of the council, the mayor, deputy mayor               
may be  dismissed prior  to the expiration of  the term of office               
on the  initiative  of  the  one-third  of  councillors,  if  the               
majority of  the established  whole   number of councillors votes               
for this.   The mayor, deputy mayor may be dismissed prior to the               
expiration of  their term  of office on other basis and procedure               
established in the Law on the Employment  Contract.                             
     If the  decision to  dismiss the  mayor, deputy mayor is not               
accepted, this  issue may be considered no sooner than  after six               
months, with  the exception of cases, when the  circumstances set               
forth in paragraph 4 of this Article  turn out.                                 
     After the  expiration of  the term  of office, if the mayor,               
deputy mayor  are not  re-elected for  a new  term and  it is not               
possible to  provide them with the previously  held job (office),               
they shall  be paid  a severance  pay  equal to their three-month               
average salary.                                                                 
     The council shall establish the salary of the mayor,  deputy               
mayor according  to the  rates  established  by  the  Government.               
The mayor,  deputy mayor  may not  hold  any  other  elective  or               
appointive  office,   work  in   any  other   state  or   private               
enterprises and  receive additionally any other salary,  with the               
exception of payment for creative activities.                                   
     The deputy mayor shall exercise the powers delegated to  him               
by the  mayor and  perform all  the duties  of the  mayor in  the               
absence of such.                                                                
     The deputy  mayor shall  preside over  the  sitting  of  the               
council or  board, when issues related to the personality  of the               
mayor are being considered.                                                     
     The powers  of the  mayor, deputy  mayor shall  be  extended               
after a  new election  until the  transfer of matters to a newly-               
elected mayor,   deputy  mayor  or to a person  authorized by the               
Government, when  direct rule  is being   temporarily  introduced               
into  the  local  authority  territory.                                         
                                                                                
     Article 10. The Board                                                      
     The council,  upon the  decision and  for the  term  of  the               
powers thereof,  shall, from  among its  members, form  a   joint               
executive   institution   -   the  board,  also  establishing the               
number of its members.                                                          
     In  separate   cases  provided   for  in  laws,  it  may  be               
obligatory to  form a  board, and  its composition  -  regulated.               
If the  board is  formed, the mayor and deputy mayor  shall be ex               
officio members  of the  board. The  mayor  shall    present  the               
candidatures of  the board  members for  the  council's approval.               
A sitting  of the  board shall  be lawful provided that at  least               
two-thirds of  all of  the board  members participate    therein.               
The agenda of a board sitting shall be drawn up by the  mayor. It               
may be  supplemented or amended by the council  decision, on  the               
proposal   of the   board  members,  controller or the Government               
representative-at-large.                                                        
     Minutes shall  be taken  at board sittings. The mayor  shall               
sign the minutes of the sittings.                                               
     Decisions of the board shall be adopted by majority  vote of               
the members  participating in  the sitting.  The board  decisions               
shall  become   effective  on   the  next   day  following  their               
promulgation, unless  a further date of  their enforcement is set               
forth in  the said  acts. Board  decisions concerning  the issues               
of the   council's   autonomous  competence must be signed by the               
mayor. The   mayor  shall be  entitled  not  to  sign  the  board               
decisions   concerning the  functions delegated  by the  State if               
said   decisions contradict  laws. The  mayor's deeds  concerning               
the decision  not to  sign, which violate the rights of  citizens               
and organizations may be appealed against in the court.                         
     On the  initiative of  1/3 of  councillors, the  council may               
declare non-confidence  in the  whole board, should the  board be               
formed, or in an individual board member, if the  majority of the               
established whole  number of  councillors   votes for  this. When               
non-confidence is  being declared,   the  board or its individual               
member must  resign from  office. If the decision to declare non-               
confidence is  not   approved, this  issue may  be considered  no               
sooner than  after six months.                                                  
     The powers of the board shall be extended after an  election               
of councillors until the formation of a new board.                              
                                                                                
     Article 11. The Administration                                             
     The  administration   shall  implement   decisions  of   the               
council, mayor   and  the board,  as well  as provide   technical               
services for the council, mayor and the board.                                  
     The council  shall approve the structure and regulations  of               
the administration,  and the  mayor (the board, should  the board               
be formed)  shall draw up a list of the staff as  well as fix the               
salaries thereof,  following the  laws and  standards approved by               
the Government  decrees and  not   exceeding the established wage               
fund.                                                                           
     The administration  shall be  headed  by  the administrator.               
The administrator shall:                                                        
     1) be  accountable to  the mayor,  implement his  ordinances               
and directives;                                                                 
     2) organize  the preparation of sittings of the council  and               
the board, and execution of documents;                                          
     3) be  responsible for  the inner  procedure of  work of the               
administration; and                                                             
     4) within his competence issue orders.                                     
     The administrator  shall be  appointed and  dismissed by the               
mayor. If  the board is formed, it shall appoint and  dismiss the               
administrator on the recommendation of the  mayor.                              
     With the  mayor's consent,  the administrator  shall appoint               
and dismiss the heads of the administration  divisions as well as               
their assistants. Other employees of  the administration shall be               
hired and dismissed from work by the administrator.                             
     Employees of  the administration  may not  be the members of               
the council they are providing services for.                                    
                                                                                
     Article 12. Chief Executive of the Neighborhood                            
     The chief executive shall be an officer of administration in               
the Neighborhood.  He shall  be appointed  and dismissed  by  the               
mayor.                                                                          
     Usually the  chief executive must be a resident - a  citizen               
of the  Republic of  Lithuania -  of the respective Neighborhood.               
Upon  the  expiration  of  the  term  of  office,  if  the  chief               
executive is not appointed for a new term and it is not  possible               
to provide him with the job, previously held by  him, he shall be               
paid a  severance pay  equal to  his three-month  average salary.               
The chief  executive's powers  shall  be  extended  after  a  new               
election of councillors until the transference of the  matters to               
a newly-appointed chief executive.                                              
     The chief  executive's salary  shall be  fixed by  the mayor               
(the board,  should it  be formed)  according  to  the  standards               
approved by the Government.                                                     
                                                                                
     Article 13. The Controller                                                 
     For  the   term  of  office  the  council  shall  appoint  a               
controller. A  controller may  be a  citizen of  the Republic  of               
Lithuania who  has a  higher education.  The controller  shall be               
appointed by  secret ballot.  The controller shall  be considered               
appointed if   the majority  of  the  established total number of               
councillors has  voted for  his   candidature. The same procedure               
shall be  applied for   appointing an assistant controller on the               
recommendation  of the controller.                                              
     The controller,  assistant controller  may not  perform  any               
elective or  appointive duties,  work in  any  other    state  or               
private enterprises  and receive  any other    salary,  with  the               
exception of payment for creative  activities.                                  
     If the  controller is  not able to perform his duties or  in               
his absence, the assistant controller shall perform  said duties.               
The controller, assistant controller may be dismissed  before the               
expiration of  his term  of office  on the   initiative of 1/3 of               
councillors upon  the  motivated    council's  decision,  if  the               
majority of  the established   whole  number of councillors votes               
for this.                                                                       
     If  the   decision  to  dismiss  the  controller,  assistant               
controller is  not approved,  this issue  may be  considered  not               
sooner than after the passage of six months.                                    
     Upon  the   expiration  of   the  term  of  office,  if  the               
controller, assistant  controller are  not appointed  for a   new               
term and  it is  not possible  to  provide  him  with  the    job               
(office), previously  held by  him, he shall be paid a  severance               
pay equal to his three-month average salaries.                                  
     The powers  of the  controller, assistant  controller extend               
after a  new election  of councillors  until the  transference of               
matters to a newly appointed controller.                                        
                                                                                
                            Chapter 3                                           
           COMPETENCE OF SELF-GOVERNMENT INSTITUTIONS                           
                                                                                
     Article 14. General Provisions                                             
     The competence  of  self-government  institutions  shall  be               
autonomous  and   delegated   by   the   State.   Self-government               
institutions, within  the limits  of  the  autonomous  competence               
ascribed  to  them  by  this  Law,  shall  be  entitled  to  free               
activities, initiative, and adoption of decisions  to the  extent               
permitted  under   the   Constitution,   laws   and   subordinate               
legislation  of   the  Republic  of  Lithuania.  Moreover,  other               
problems, the   resolution  of which  does not  fall  within  the               
competence   of state institutions, which arise to the population               
of     municipality  communities   shall  be  resolved  in  local               
authorities.                                                                    
     The state functions shall be delegated to local  authorities               
by this Law or other laws.                                                      
     Self-government  institutions,  adopting  decisions  on  the               
issues within  the competence  delegated by the State,  shall act               
in compliance with laws, Government decrees and other subordinate               
legislation.                                                                    
     State institutions   shall  act  and control self-government               
institutions, which  execute the  functions    delegated  by  the               
State, only in cases and forms provided  by laws.                               
                                                                                
     Article 15. Autonomous Competence of the Council                           
                                                                                
     The council shall:                                                         
     1) elect and dismiss the mayor and deputy mayor;                           
     2) form  committees, and, upon the decision of the  council,               
the board,  administrative and  other commissions,   alter  their               
composition, approve  candidatures, proposed   by  the  mayor, of               
the chairmen of committees and  commissions;                                    
     3) determine the structure, list of staff and the wage  fund               
of the administration;                                                          
     4) appoint a controller and assistant controller;                          
     5)  adopt   decisions  concerning   the  division   of   the               
respective local  authority  territory  into  neighbourhoods  and               
establish their limits;                                                         
     6) approve the council statute;                                            
     7) approve the regulations for activities of the mayor  (the               
board, should it be formed) and controller;                                     
     8) terminate  the powers  of the  councillors prior  to  the               
expiration of  their term  of office  in cases and the  procedure               
provided for  in the  Law on  the Status  of the  Local Authority               
Councillor;                                                                     
     9) approve  the municipal  budget  and  the  report  on  the               
implementation thereof;                                                         
     10)  approve     the   procedure    for  accumulation    and               
utilization of  non-budgetary funds and resources and  reports on               
their utilization;                                                              
     11) distribute or authorise the mayor (the board,  should it               
be  formed)   to  distribute   additional  municipal    budgetary               
resources;                                                                      
     12) establish  prices and  tariffs for  services rendered to               
residents by public municipal enterprises;                                      
     13) approve the general sum of allotments and wage funds for               
institutions and  organizations which receive  financing from the               
municipal budget;                                                               
     14)  establish   local  fees   according  to  the  procedure               
established by laws;                                                            
     15) adopt  decisions to establish, reorganize and  liquidate               
municipal enterprises and organizations which  function according               
to the Law on Enterprises;                                                      
     16) adopt decisions  on  the  establishment,  reorganization               
and liquidation of institutions, enterprises, and  organizations,               
maintained from the  municipal budget funds;                                    
     17) establish  the size  of  payment  or  compensations  for               
plots of  land which  are being  bought out,  utilization of  the               
municipality   equipment, facilities,  and  natural  resources  ;               
     18) approve  the master  plan for  the  development  of  the               
respective local  authority territory and amendments  thereof, as               
well as the general schemes for the development and establishment               
of settlements and towns;                                                       
     19) in  accordance with  the procedure  prescribed by  laws,               
establish and  manage local  authority protected  territories and               
objects of landscape;                                                           
     20) establish the procedure for approval of local  authority               
contracts  and  agreements  with  enterprises,  institutions  and               
organizations located  on the  territory  of said and other local               
authorities, as well as with  other local authorities and foreign               
enterprises;                                                                    
     21) may  at the  expense of  the council grant privileges to               
enterprises which  create new  work places  or meet  other urgent               
needs of the residents;                                                         
     22) utilize bank credits, take and lend loans in the  manner               
prescribed by  laws, establish  conditions for  the   use of bank               
credits   by local  authority executive  institutions, as well as               
for the lending and granting of  loans;                                         
     23)  consider   issues  raised  by  the  councillors,  adopt               
decisions thereon;                                                              
     24) hear  the reports of the mayor (the board, should it  be               
formed) and  other organs,  formed by  the council,  inquiries by               
councilors to   the  officers  of  the  administration, heads  of               
municipal   enterprises and   organizations  and adopt  decisions               
thereon;                                                                        
     25) on  its own  initiative, the  proposal or  demand of the               
Government  representative-at-large, or other institutions repeal               
or withdraw   the decisions and  ordinances of the council, mayor               
(the board,  should  it  be  formed)  and  other  self-government               
institutions, which contradict the laws, as well as the decisions               
of the  Government or the council;                                              
     26) approve  the rules  concerning the  protection of  green               
plantations, of  maintaining order  and  sanitary  conditions  in               
towns and settlements, and trade in market places and other rules               
for the  violation whereof  an   administrative responsibility is               
established;                                                                    
     27) adopt  decisions to join the local authority unions  and               
international self-government organizations;                                    
     28)  approve  the  symbols  of  a  respective  municipality,               
submit  proposals  to  approve  the  coat  of  arms  of  a  local               
authority; and                                                                  
     29) submit  proposals concerning the altering of the  limits               
of the local authority territory.                                               
                                                                                
     Article 16. Competence Delegated by the State                              
                                                                                
     Self-government institutions  shall  perform  the  functions               
of civil registration, keep the register of  municipal, state and               
private enterprises,  as well  as  public organizations; they may               
also manage  state parks   (national  and regional), organize the               
municipal police,  civil security and fire prevention system, and               
implement  other functions delegated by laws.                                   
     In implementing the functions delegated by the State,  self-               
government institutions  shall  observe  the  laws,  execute  the               
Government decrees.                                                             
                                                                                
     Article 17. Competence and Powers of the Mayor                             
                                                                                
     The  mayor   shall  provide  agendas  of  council  sittings,               
convene council   sittings  and  preside  over  them,  coordinate               
the  activities  of  council  committees  and  commissions,  sign               
council decisions  and minutes  of the  sittings. The mayor shall               
organize the implementation of  council decisions.                              
     If a  joint executive  institution -  the board  - is  being               
formed, the  mayor shall  head it  and preside over its sittings,               
sign decisions  on the  issues of  an independent  competence and               
shall have  the right not to sign the board  decisions concerning               
the issues   of  the competence  delegated by the State, if these               
decisions, in  his   opinion, contradict  the laws  or Government               
decrees.                                                                        
     The work of the mayor shall be regulated by the  regulations               
approved by the Council.                                                        
     While executing his powers, the mayor shall:                               
     1) represent  or authorize  other persons  to represent  the               
council and  the board  in court,  in relations  with other local               
authorities, state institutions, institutions of  foreign  states               
as   well   as   self-government institutions,  residents of  the               
municipality;                                                                   
     2) propose  candidatures for  a deputy  mayor,  chairmen  of               
committees and  commissions, other heads of bodies formed  by the               
council;                                                                        
     3)  appoint   and  dismiss   an  administrator   and   chief               
executives, approve   the regulations  of the  chief  executive's               
activities;                                                                     
     4)  draw   up  and  present  to  the  council  for  approval               
contracts and  agreements with  enterprises,  institutions    and               
organizations functioning  on the  territory  of  the  respective               
local authority  and other  local authorities,   as  well as with               
foreign enterprises and other local  authorities;                               
     5) organize   the general education and additional  training               
of children  and youth  and the general training  of adults, look               
after the cultural education of the  population and the promotion               
of general and ethnic  culture, organize  primary health care and               
disease   prevention for residents, as well as care for the sick,               
disabled and  elderly, ensure that the territory is  sanitary and               
that the  requirements for  hygiene and  environmental protection               
are being  complied with, and  develop the industry of recreation               
and tourism of the  residents; and                                              
     6)  organize   the  support,  care  and  attendance  of  the               
disabled and single elderly persons, arrange charity  events, and               
distribute accumulated funds and donations in accordance with the               
procedure established by the council.                                           
     While executing  these and other provided powers, the  mayor               
shall adopt ordinances.                                                         
                                                                                
     Article 18. Competence of the Board                                        
                                                                                
     In  the   event  that  the  council  forms  a  board,  while               
executing its powers the latter shall:                                          
     1) upon  the instruction  of the  council,  set  prices  and               
tariffs for  services provided  by municipal enterprises  for the               
population;                                                                     
     2)  upon   the  authorization  by  the  council  appropriate               
additional municipal budgetary funds and other resources;                       
     3) organize  analysis of  the development of the  respective               
territory, preparation  of drafts  of general  long-term  social,               
cultural,   economic,   investment,   demographic, ecological and               
other programmes;                                                               
     4) organize  the implementation of the programmes,  approved               
by  the council,  on the  local authority  territory;                           
     5) organize the drafting of a master plan of the  respective               
territory, as well as projects and detailed  plans concerning its               
amendments;                                                                     
     6) control  over compliance  with the  requirements for  the               
construction,   extension and  renovation of all  facilities, the               
erection of  buildings and  constructions   on the  territory, as               
well as  the protection of landscape,  architectural and cultural               
monuments;                                                                      
     7) submit  to  the  council  for  consideration  or  resolve               
itself  issues   concerning  the   design  and  building  of  the               
facilities  of   the  social   and   industrial   infrastructure,               
supervise  the   establishment   of   the   procedure   for   the               
exploitation  thereof,   and,  when   necessary,  discharge   the               
functions of a single client;                                                   
     8)  compose  a  draft  budget  and  account  on  the  budget               
implementation and   submit  them to  the council  for  approval;               
     9)  form   non-budgetary  funds   in  accordance   with  the               
regulations approved by the council;                                            
     10)  control   the  expediency   and   lawfulness   of   the               
utilization  of  funds  which  have  been  formed  by  the  local               
authority;                                                                      
     11) control  the implementation of the rules established  by               
the council  for the violation of which administrative  liability               
is provided;                                                                    
     12)  organize   the   construction   and   exploitation   of               
residential premises,  arrange and  supervise  waiting  lists  of               
citizens for  state support,  rent and  sale residential premises               
belonging to the municipal fund pursuant to  laws;                              
     13) examine  and analyse  migration processes,  organize, in               
conjunction with  the territorial  labour exchanges, the rational               
employment of  the residents,  the improvement  of their  skills,               
their retraining, and communal work;                                            
     14) in  conjunction with  other state institutions,  prepare               
and implement  preventive measures,  rescue the  residents in the               
event of  disaster, natural  calamity,  epidemic, or  outbreak of               
infectious diseases,  and   liquidate the  consequences  thereof;               
     15)  prepare  recommendations  for  the  council  to  found,               
reorganize   and    liquidate   institutions,   enterprises   and               
organizations financed from the municipal budget funds;                         
     16) manage,  utilize and  protect  the  municipal  property;               
     17) call  meetings of  residents in  which, at  least once a               
year, provide  information concerning  local  authority  affairs,               
account to the council for its activities once a  year as well as               
upon request.                                                                   
     The competence  of the  board  shall  be  regulated  by  the               
regulations approved by the council.                                            
     Should the  board be not formed, the powers assigned to  the               
board shall be exercised by the mayor.                                          
                                                                                
     Article 19. Competence of the Chief Executive                              
                                                                                
     The  chief   executive's  work  shall  be  governed  by  the               
regulations of his activities.                                                  
     The chief executive shall:                                                 
     1) upon  the instruction  of the mayor, prepare and  present               
draft ordinances  of the  mayor (the board, should  it be formed)               
on issues concerning the Neighbourhood;                                         
     2)  submit   to  the   mayor  recommendations   for   social               
protection;                                                                     
     3) present  to the  mayor proposals  concerning the care  of               
the territories  and landscape  objects protected  by  the  local               
authority;                                                                      
     4) collect statistics ascribed to his competence;                          
     5) issue to the residents  of the  respective  Neighbourhood               
certificates  concerning  their  social  status;                                
     6) call  meetings of  the residents  of  the  Neighbourhood;               
     7) organize the maintenance of cemeteries;                                 
     8) gather  information concerning  the need for land  lease;               
     9) organize the collection of fees and local taxes;                        
     10) keep economic management books;                                        
     11)  control     and   furnish  to   the  local   government               
information concerning   the   implementation  of  the  decisions               
of the  council (the board, should it be  formed), and ordinances               
of the  mayor on  the territory of  the respective Neighbourhood;               
     12) in rural areas register births and deaths, issue  burial               
permits, execute notarial acts in the manner  prescribed by laws;               
and                                                                             
     13)  perform   other  functions  delegated  by  the  mayor's               
ordinance (decision of the board, should it be formed).                         
                                                                                
     Article 20. Competence of the Controller                                   
                                                                                
     The controller,  not exceeding  the  powers  established  by               
laws of the Republic of Lithuania and decisions of council, shall               
supervise the utilization of the municipal budgetary  funds,  the               
legitimacy,   expediency  and  effectiveness of  the exploitation               
of  the  municipal  property,  as  well  as  the  state  property               
entrusted to the  local authority.                                              
     The activities  of the  controller shall be regulated by the               
regulations.  The controller  shall within  his  competence issue               
orders.                                                                         
     The controller shall:                                                      
     1)  direct   the  controlling   service,  hire  and  dismiss               
employees of   the  said   service (without  exceeding  budgetary               
appropriations and the established wage fund);                                  
     2)  present   to  the  council  conclusions  concerning  the               
implementation of  the  municipal  budget,  utilization  of  non-               
budgetary assets and funds;                                                     
     3) on  the proposal  of the  council, its  committees, mayor               
(the board,  should it  be formed),  or on  his  own  initiative,               
organize  inspections and audits in the administration, municipal               
public   and   state   stock   enterprises,   institutions,   and               
organizations of the local  authority;                                          
     4) present to the local authority  institutions  conclusions               
and proposals on the results of inspections and audits; and                     
     5) carry  out other  actions ensuring the elimination of the               
established violations.                                                         
     The controller shall be a legal person.                                    
                                                                                
                            Chapter 4                                           
                THE BASIS OF ECONOMIC ACTIVITIES                                
                      OF LOCAL AUTHORITIES                                      
                                                                                
     Article 21. Municipal Property                                             
     The basis of the economic activities of the local  authority               
shall be the municipal property.                                                
     The municipal  property shall be the property which  belongs               
to the  local authority by the right of ownership,  the functions               
of owner  whereof shall  be implemented by  the council according               
to laws.                                                                        
     The  facilities of  municipal ownership shall be established               
by laws.                                                                        
     The local authority shall acquire the ownership right  by:                 
     1)   conveying state-owned facilities to the local authority               
ownership in accordance  with the  procedure established by laws.               
In this case, there may  be provisions,  established by  laws,for               
the  limitation of  the disposal of such objects;                               
     2) creating new objects of ownership; and                                  
     3) concluding  contracts, or  in other cases provided for in               
laws.                                                                           
     The council may delegate the  right to  manage and   exploit               
concrete objects of local authority ownership to the institutions               
formed by it or to economic entities.                                           
                                                                                
     Article 22. Ownership Relations in Changing the Limits                     
               of the Territories of Local Authorities of the                   
               Republic of Lithuania                                            
     When liquidating a local authority or changing the limits of               
a territorial  administrative unit of the Republic of  Lithuania,               
the  real estate of the  local authority  shall  be  ascribed  to               
another local authority by that part of the  real  estate   which               
is   on the ascribed     territory; other  property and  debts of               
the local authority shall  be distributed among local authorities               
in proportion to the amount of taxes of legal and natural persons               
of the ascribed territory collected to  the  municipal budget.                  
     Disputes concerning  property of administrative units of the               
territory of  the   Republic  of   Lithuania  arising   from  the               
reorganization   of the  limits of  administrative units  of  the               
respective territory shall be settled by the court.                             
                                                                                
     Article 23. Financial Resources of the Local Authority                     
     Financial resources of  the   local   authority   shall   be               
comprised  of  the  municipal budget, non-budgetary    funds  and               
resources.                                                                      
     Each local authority shall have an independent budget.                     
The municipal  budget shall   be drawn up and approved for  the                 
period of one year.                                                             
     During a  budget year  the council  may amend the budget and               
make up an additional budget in the same procedure as  it is made               
and approved.  The relations  between the Lithuanian State budget               
and  the budgets of local authorities shall  be regulated  by the               
Laws of the Republic of Lithuania on Budget Structure  and     on               
Taxation.                                                                       
     The municipal  budget revenues  shall  be  formed  from  the               
income received for the exploitation of property which is in the                
ownership of   the  local  authority,  from  the  taxes  paid  by               
enterprises, institutions  and organizations  which  are  on  the               
territory of the  respective local authority, and from other                    
sources   of   income ascribed to  local authorities  by laws  of               
the Republic of Lithuania.                                                      
     In the event that the income  assigned to  budgets of  local               
authorities is insufficient for meeting the social needs of local               
authorities, municipal budgets shall be provided with  subsidies                
from the  Lithuanian  State  budget  for  the  implementation  of               
purpose-oriented programmes.                                                    
     Supplementary income of municipal budgets which are received               
during the implementation of the budget as well as funds received               
from expenditure savings shall be left  to local authorities.                   
     In  the  event  that  the  revenue  or  expenditure  of  the               
municipal budget  changes  due  to  acts  adopted  by  the  state               
institutions   of Lithuania,  the  sums  of  said  changes  shall               
be appropriately compensated  for  from the  Lithuanian     State               
budget or from municipal budgets.  The  sums of     compensations               
shall be  coordinated by the  interested parties. In the event of               
a dispute, the final decision shall be  adopted  by   the  court.               
Funds from the Lithuanian State budget  shall be  allocated    to               
exercise  functions delegated by the state.                                     
     Local authority  non-budgetary funds  and resources shall be               
formed from local fees and other sources of income. The procedure               
for the  establishment  of  local  fees  and  the  formation  and               
utilization of  local authority non-budgetary funds and resources               
shall be  established by laws.                                                  
     The local authority may  make  use   of  bank  credits,  may               
borrow and grant loans according to the procedure established  by               
laws.                                                                           
                                                                                
                            Chapter 5                                           
                 RELATIONS OF LOCAL AUTHORITIES                                 
     WITH STATE INSTITUTIONS AND INTERNATIONAL ORGANIZATIONS                    
                                                                                
     Article 24. Relations of Local Authorities with State                      
               Institutions                                                     
     Relations  between  the councils  and executive institutions               
of local  authorities and  State institutions  shall be  based on               
the  Constitution and laws of the  Republic of Lithuania.                       
     Self-government institutions  shall not be  subordinate   to               
the State institutions.                                                         
     In  the   cases  when  higher  State  institutions  consider               
matters related to interests  of a local  authority,  the  former               
must inform the local authority about this. The   council submit                
proposals  which  must be     considered    by    higher    State               
institutions.                                                                   
     The Government and its  institutions  shall  coordinate  the               
decisions on issues concerning the planning    of    the    State               
territory with local authorities and propose the  changes in  the               
limits    of local authorities, taking into  consideration    the               
proposals of local authorities.                                                 
     The  Government shall support local authorities   in   train               
ing, improving and retraining municipal employees.                              
     Local authorities   shall be  informed and   consulted    at               
the State institutions on     all issues     concerning     local               
authorities.                                                                    
                                                                                
     Article 25. Representation of Local Authorities of the                     
               Republic of Lithuania                                            
     The association of local authorities shall   represent local               
authorities of the Republic of Lithuania in  the  Seimas, in  the               
relations  with     the  President, in  the    Government     and               
international organizations.                                                    
                                                                                
                            Chapter 6                                           
               LEGAL GUARANTEES FOR THE ACTIVITIES                              
                      OF LOCAL AUTHORITIES                                      
                                                                                
     Article 26. General Provisions of Legal Guarantees for                     
               the Activities of Local Authorities                              
     The decisions  of  self-government    institutions   adopted               
within   their   competence shall  be binding to all enterprises,               
institutions and organizations     located on  the territory of a               
respective local authority as well as   to   the   officers   and               
residents thereof.                                                              
     Local authority  rights established  by this  Law may not be               
restricted or curtailed, except in the cases provided  for in the               
laws of the Republic of Lithuania.                                              
                                                                                
     Article 27. Legal Protection for the Activities of the                     
               Councils                                                         
     Councils shall have the right  to appeal to court concerning               
the violations of their rights.                                                 
                                                                                
     Article 28. Legal Supervision of Self-Government                           
               Institutions and Officers                                        
     The  compliance of  local authorities  with the Constitution               
and laws  of the   Republic   of Lithuania   and decisions of the               
Government shall be supervised by the Government representatives-               
at-large.                                                                       
     Complaints of  citizens concerning  the abuse  of  power  or               
bureaucracy of municipal officers  shall be  examined   by    the               
Seimas Ombudsmen whose powers shall be defined by the  Law on the               
Seimas Ombudsmen.                                                               
     Acts or actions  of councils,  their executive  institutions               
and  officers,  which   violate  the   rights  of   citizens  and               
organizations may be appealed against in the court.                             
                                                                                
     Article 29. Symbols and Business Conduct of Local                          
               Authorities                                                      
     The coat  of arms   of  an   administrative  center   of   a               
municipality shall   be   considered   the   coat   of   arms  of               
the  respective local authority. The local authority which  does                
not have a coat of arms shall use the State Emblem.                             
     The local authority coat of arms   shall be  used on certain               
types  of   seals,  signs   and  headletters  of  self-government               
institutions.                                                                   
                                                                                
                                                                                
     Local  authority   business  shall   be  conducted   in  the               
Lithuanian language  and must  correspond to the requirements for               
business  conduct   established by the  State.                                  
                                                                                
     Article 30. Introduction of Direct Rule into the Local                     
               Authority Territory                                              
     By  the   decision  of   the  Seimas,  direct  rule  may  be               
temporarily introduced into the territory of the local authority,               
but  not longer  than up to the expiration of the term of office.               
Upon the introduction of direct rule, the municipal council and                 
the  executive institutions   formed  by   it  shall  lose  their               
powers.                                                                         
     Direct rule may be introduced if:                                          
     1) the  actions of self-government institutions threaten the               
integrity of the state territory and constitutional order;                      
     2) courts  establish that the council fails to adhere to the               
Constitution   of the Republic of Lithuania, violates laws;                     
     3) the council fails to elect a mayor, deputy mayor and does               
not  form   self-government    institutions   within   the   time               
established in  this Law  or fails  to convene  for the  sitting,               
convoked  by the mayor, three times in success; and                             
     4) the    mayor or  the council    does not  adhere to the                 
provisions of Par.3 of Article 9 of this Law.                                   
     Proposals to temporarily introduce direct   rule    may   be               
submitted to  the Seimas  by the  Government of  the Republic  of               
Lithuania, and  the conclusions  concerning the  validity of this               
proposal shall   be    submitted  to  the  Seimas  by  the  Local               
Government Committee of the Seimas.                                             
     In the decision to  temporarily introduce  direct rule,  the               
Seimas shall  set the  date of  a new  election to  the municipal               
council.                                                                        
     The Government of the Republic of Lithuania  shall implement               
direct rule of a municipality in accordance  with the  Law of the               
Republic  of   Lithuania  on   Direct  Rule   of   Administrative               
Territorial Units.                                                              
                                                                                
     Article 31. Coming into Effect of the Law                                  
     This Law  shall become  effective on   the day following the               
elections to the  councils of  municipalities of  the Republic of               
Lithuania. Upon  coming into  effect of  this Law, the Law of the               
Republic of Lithuania on the  Fundamentals  of  Local  Government               
becomes invalid.                                                                
                                                                                
     I promulgate this Law enacted by the Seimas  of the Republic               
of Lithuania                                                                    
                                                                                
ALGIRDAS BRAZAUSKAS                                                             
President of the Republic                                                       
                                                                                
Vilnius                                                                         
7 July 1994                                                                     
No.I-533