Local Self-Governance Act, 2055 (1999).

The purpose of this Act is to support the decentralization process in general and capacity building of the districts, in particular with respect to the rural infrastructure development, and to improve rural accessibility.
Village Development Committees shall be constituted as executives of the Village Council in village development areas, Municipalities shall be constituted as executives of the Municipal Council in municipal areas, and District Development Committees shall be constituted as executive bodies of District Councils in district development areas. Functions, duties and powers of the Committees and municipalities, among other things, shall include: carry out agriculture development programmes; prevention and control of animal diseases; preparation of drinking water projects for the supply of drinking water within the village development area; preservation of sources of water; preparation of projects on irrigation, dams, canals, water channels, etc.; preparation of programmes on soil erosion and river control; formulation of land utilization plans; making of arrangements for sewerage and drainage in settlement areas; afforestation measures; and preparation of programmes in respect of forests, vegetation, biological diversity and soil conservation. Village Development Committees, Municipalities and District Development Committees shall have judicial power and may levy taxes as provided for in the Act.