Insertion of : In the Principal Act, after Section 75, a new section 75-A shall be inserted, Section 75-A namely:-

“75-A. Constitution of Basic Services to the Urban Poor Fund

1. (1) A separate fund called the “Basic Services to the Urban Poor Fund” shall be constituted by every Municipality for delivery of basic services to the urban poor including the inhabitants of slum areas.
2. (2) A minimum of twenty five percent of the funds within the municipality’s budget shall be earmarked and used for providing basic services to the urban poor, including inhabitants of slum areas on a yearly basis. The allocation to the fund shall be made from the following municipal budgetary resources:
   • (a) Municipality’s own sources of revenue e.g. taxes, fees, user charges and rent etc.;
   • (b) Assigned revenues;
   • (c) Allocations from Central / State Finance Commissions/ other inter -governmental transfers;
   • (d) Contributions in cash/kind, gifts from individuals, organizations, donors for services to the poor;
   • (e) Grants from externally aided projects;
   • (f) Sale of municipal assets;
   • (g) Others sources as determined by the Municipality. Explanation- For the purpose of this section any grant or contribution by whatever name called, received by the Municipality which is exclusively for the development of slum areas shall not be a part of the above earmarked funds.
3. (3) Utilization of the earmarked fundsThe earmarked funds under sub-section (1) of this section shall be for providing basic services to the urban poor including the inhabitants of the slum areas. Explanation-For the purposes of this section ‘basic services’ shall include expenditure on capital and revenue account directly incurred on water supply, drainage, sewerage, construction of community toilets, solid waste management, connecting roads, street lighting, public parks and play grounds, community and livelihood centers, community health centers, pre-primary and primary education centers, affordable housing for poor, and other services as determined by the Municipality but shall not include establishment expenses, including salary and wages, not directly and specifically incurred for delivery of basic services to the poor.
4. (4) The allocation of the funds and its utilization for providing basic services to the urban poor should be detailed and enclosed with the Municipal Annual Budget as P-budget along with the corresponding figures for the previous year.
5. (5) The fund shall be in the nature of a non-lapsable fund. In the event of the annual allocations not fully utilized, the balance funds should not be transferred to the municipal general fund but carried forward for utilization in the subsequent year(s). The fund allocation in the subsequent years shall be considered in addition, and shall not be reduced by the unspent funds of the previous year(s).
6. (6) A separate bank account shall be opened with a nationalized bank called-’Basic Services to Urban Poor Fund’ account wherein funds earmarked under sub-section (1) of this section shall be periodically deposited ensuring that the yearly allocation is equal to the allocation as in the Municipal budget.
7. (7) There shall be maintained separate primary books of accounts with detailed accounting heads in line with the National Municipal Accounts Manual for operation of special fund accounts.” 12. Amendment of : Sub-section 2 of 216 of the Principal Act shall be substituted by the following, Section 216 namely :- “(2) The annual value of any vacant land and building in any ward and local council of the municipality shall be the sum of the amount arrived at by multiplying the value per unit area of such vacant land and multiplicative factors and the amount arrived at by multiplying the value per unit area of the covered space of such building by the total area of such covered space and multiplicative factors, if any, and shall be determined accordingly by an order of the Board of Councillors, and a copy of the order shall be supplied within ten days thereof to the owner or the occupier of the land or the building, as the case may be, in such Form, and in such manner, as may be prescribed under the Rules framed under this Act.Provided that -
   • (i) every land, which is not built upon, comprised in a holding shall be assessed separately; and
   • (ii) machinery and furniture shall be excluded from valuations under this section”. Explanation I– In the case of a building with appurtenant land, the area of the land under the plinth area of the building shall be excluded from the total area of the land, the balance being treated as vacant land, which shall be assessed as such. Explanation II– The covered space of any building shall mean the total floor area of the building in all the storeys. Explanation III– For the purposes of this section, “machinery” shall include lift, air-conditioning equipment, and equipment for providing earthquake proofing. Explanation IV – The annual value of any land or building, as determined under this section, shall be a multiple of ten rupees, any fraction below five being ignored and any fraction of five or above being rounded off to the next ten rupees.” 13. Amendment of : In Section 216 of the Principal Act, new Sections 216-A and 216-B shall Section 216 be inserted as follows, namely:- “216-A. Classification of lands and buildings and determination of unit area values.
8. (1) The Board of councillors shall, on the recommendation of the State Property Tax Board or the State Government as the case may be, and having regard to –
   • (a) the location of lands and buildings in the municipal area concerning its access to public roads;
   • (b) the location of lands and buildings in the municipal area with access to water, sewerage, and other civic facilities, and adjacent to markets, schools, hospitals, and any other facilities that influence the standard of living in that area; declare its intention to classify lands and buildings in each ward of the Municipality into such groups or units as the Board of Councillors may specify by a public noticed, and shall also specify in such public notice the annual value it proposes to fix per unit area of covered space of buildings within each such group or units. Explanation I- For the purpose of this Act, the State Property Tax Board means the State Property Tax Board constituted by the State Government from time to time.
9. (2) If any owner or occupier of any land or building in any ward in respect of which a public notice has been issued under sub-section (1), has any objection to the manner of classification of any group/ unit or groups/units or the value per unit area of vacant land or the value per unit area of covered space of building in any such group, he may submit to an officer of the Municipality duly authorised by the Municipality in this behalf, his objection in such Form, and containing such particulars, as may be prescribed, within sixty days from the date of publication of such public notice, and such objection shall be considered by the Board of Councillors.
10. (3) On the expiry of sixty days from the date of publication of the public notice under sub-section (1), and after considering the objections, if any, the Board of Councillors, shall by a public notice, specify group wise the value per unit area of covered space of building.
11. (4) The unit area value of vacant land and the unit area value of covered space of building, as may be specified under sub-section (1), in respect of a group/unit in any ward shall remain in force for a period of five years and shall be revised at the expiration of each such period of five years:Provided that till the revision of such unit area values is completed, the existing unit area values shall continue to be in force. 216-B. Multiplicative factors to determine annual property values.Multiplicative factors to determine annual property value as specified in sub-section (2) of Section 216 would include,
    • (a) Location Factors, where the property abutted by categories of road or areas other than roads;
    • (b) Structure factor, the category of construction of the property;
    • (c) Ownership and Usage Factor, the category of owning and purpose of using the property; and
    • (d) Age factor, considering the year of completion of construction of the property; Provided that the above factors would be as per the provisions of this Act and Rules framed thereunder by the State Government for the purpose and further as would be adopted by the Board of Councillors.”