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Dmitry Medvedev Signs Law Amending Legal Status of Budgetary Institutions

11.05.10

President Dmitry Medvedev has signed the Federal law “On Amendments to Certain Legislative Acts of the Russian Federation in Connection with the Improvement of the Legal Status of Governmental /Municipal/ Institutions” adopted by the State Duma on April 23, 2010, and approved by the Federation Council on April 28, the Kremlin press service reports.

The law changes the legal status of existing budgetary institutions in the fields of science, education, healthcare, and culture, which can operate on the basis of market principles, by creating conditions and stimuli for the reduction of internal costs and increasing their efficiency. In particular, it has been suggested that the system of budget financing in such institutions be replaced with subsidies to be provided as part of government assignments, allowing budgetary institutions to engage in profit-generating activities, provided such activities are allowed by their charters, with the proceeds to be managed by the institutions themselves, and that budgetary institutions should be given more rights to use any movable property assigned to them, except for highly valuable movable property.

The law also calls for creating a new type of governmental /municipal/ institutions – kazyonnyoe (government-owned) institution – by reorganizing existing budgetary institutions in certain fields, such as national defense, national security, psychiatric aid to the population, etc. It has been proposed that a closed list of budgetary institutions subject to such reorganization be drawn up. The law also allows budgetary institutions to provide paid services above the governmental /municipal/ assignment. A budgetary institution will also be entitled to engage in other non-core activities, provided such activities are stated in its charter. The law preserves the use of simplified taxation for autonomous institutions. An autonomous institution, just like a budgetary one, may not refuse to fulfill a governmental /municipal/ assignment.   

The law will enter into force from January 1, 2011, with the exception of some of its provisions that will be enacted separately. The law establishes a transitional period from January 1, 2011 to July 1, 2012, and sets the deadlines for creating subordinated budgetary and government-owned institutions.

Source: http://www.prime-tass.ru/news/0/%7BA1951D1F-CFBC-4B4E-8547-921445850A8B%7D.uif Source: PRIME-TASS

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