The Local Government Operation Act, 2074 that came into effect since 15 October 2017 has paved a strong legal foundation towards institutionalizing legislative, executive and quasi-judiciary practice of the newly-formed local government. The legal mechanism was enacted as per the Article 296 (1) of the Nepal Constitution-2015 so as to leverage local leadership and governance system. The Act has stipulated several arrangements related to authorities, duties and responsibilities of local government, assembly meeting and working system, assembly management procedures, plan formulation and implementation, judicial works, financial jurisdictions, administrative structure and district assembly, among others.

This newly formed act describes about the criteria to divide a state into municipalities or rural municipalities and respective rights, duties and responsibilities in different development and conservation sectors. It clarifies the rights of municipalities/ rural municipalities to form local laws, regulations and criteria for conservation of environment protected areas and species; for environmental pollution and hazard control; solid waste management; etc.