Title: HRVATSKI SABOR
Author: bhorvat

Act on regional development of Republic of Croatia (OG 147/14)	unofficial translation
		neslužbeni prijevod

THE CROATIAN PARLIAMENT
2751
Pursuant to the Article 89 of the Constitution of the Republic of Croatia, I hereby issue the 
DECISION
PROMULGATING THE ACT ON REGIONAL DEVELOPMENT OF THE REPUBLIC OF CRROATIA
I hereby promulgate the Act on Regional Development of the Republic of Croatia, passed by the Croatian Parliament at its session on 2 December 2014.
Class: 011-01/14-01/159
Number: 71-05-03/1-14-2
Zagreb, 4 December 2014
President 
of the Republic of Croatia
Ivo Josipović, m. p.

ACT
ON REGIONAL DEVELOPMENT OF THE REPUBLIC OF CROATIA
PART ONE
BASIC PROVOSIONS
Title I
GENERAL PROVISIONS
Scope of the Act
Article 1
(1) The Act regulates objectives and principles of regional development management of the Republic of Croatia, planning documents of regional development policy, institutions responsible for regional development management, assessment of the development level of the local and regional self-government units, methods for determination of urban and assisted areas, supporting development of the assisted areas, implementation, monitoring and reporting on regional development policy aiming on utilisation of the EU funds in more efficient manner.
(2) This Acts provides legal basis for implementation of Regulation (EU) No 1301/2013 of the European Parliament and the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ L 347/289).
Objective of regional development in the Republic of Croatia
Article 2
(1) The objective of the regional development policy is to contribute to the socio-economic development of the Republic of Croatia, in accordance with principles of sustainable development, by creating conditions which enable strengthening of competitiveness and realisation of own development potentials of all parts of the country.
(2) In order to achieve aforementioned objective, regional development policy especially aims at: ensuring connections of local and regional needs with development priorities at the central level and with the goals of EU cohesion policy; supporting less develop areas to increase and use their own development potential optimally by eliminating the reasons for development difficulties; respective measures for balanced and sustainable development of local and regional self-government units in border area; encouraging territorial cooperation and more efficient utilisation of the European structural and investments funds dedicated to regional and urban development.
Basic terms
Article 3
Terms used in this Act are explained as follows:
1. development index – a composite indicator calculated as weighted average of several socio-economic indicators with the purpose of measuring the development level of local and regional self-government units
2. public-legal body – state administration body, other state body, body established by local or regional self-government unit or legal entity with public authorities
3. local action group (LAG) – entity composed of representatives of local self-government, small and medium enterprises, non-profit organisation and other representatives of different socio-economic groups which are agreeing on joint approach for development of certain geographic area
4. local development agency – legal entity established with aim of more efficient coordination and supporting development on local level
5. national development documents – strategic documents adopted by the Government of the Republic of Croatia or the Croatian Parliament determining the main national development goals and other key elements of individual public policies
6. partnership council – advisory body composed of representatives of public, business and civil sector respectively representatives of state administration bodies, regional self-government units, local self-government units, business entities, scientific community, social partners and civil society organisation, that discuss and prepares opinions and proposals on development documents during their preparation, drafting and implementation 
7. planning documents of regional development policy – Strategy of regional development of the Republic of Croatia, county development strategy and development strategy of urban area
8. areas with specific development issues – geographic areas that can be defined based on the difference in their natural, geographical, social and economic characteristics in comparison to other areas in the Republic and Croatia and that therefore require individual programming and planning approach by institutions responsible for regional development 
9. regional development policy – refers to holistic and balanced set of objectives, priorities, measures and actions aiming at enhancement of long-term economic growth and general improvement of life quality, in accordance with sustainable development principles and focused to decrease regional differences
10. affairs of general public interest – affairs related to implementation of specific tasks, in the interest of community and prescribed by specific provision in which the nature of the tasks is described  
11. assisted area – an area within Republic of Croatia which is according to development index evaluated as lagging in comparison to national average and development of which should be particularly encouraged
12. plan of development programme – presentation of planned expenditures related to investments and provision of capital assistance and donations prepared in accordance with specific act for three-year period
13. development agreement – document in which priorities of central and regional level are harmonised and strategic regional development projects are defined
14. development project – project of construction and/or reconstruction of communal, economic, energy, social or other infrastructure that supports development, building or strengthening of educational, cultural, scientific and other institution, strengthening and development of social potential, and economic and other projects contributing to regional development and strengthening regional competitiveness
15. regional development – long-term process of enhancement of social and economic development of certain area actualised by recognition, supporting and management of development potential of the area
16. regional coordinator – legal entity or administrative body established with the purpose of efficient coordination and enhancement of regional development at the level of regional self-government unit
17. regional competitiveness index – analytical indicator based on which competitiveness of statistical regions and counties is monitored and evaluated since 2007, based on methodology and research of World Economic Forum and International Institute for Management Development from Laussanne, composed of large number of individual indicators describing quality of business environment and business sector
18. statistical region – territorial unit for statistic of 2^nd level – NUTS 2 region defined on the basis of criteria established by Regulation (EU) No 1059/2003 of the European Parliament and the Council of 26 May 2003 on the establishment of a common classification of territorial units for statistics (NUTS)
19. Strategy of Regional Development of the Republic of Croatia – main planning document of the regional development policy which defines objectives and priorities of regional development in Republic of Croatia and the methods for their achievement, areas with specific development issues, relationships and activities of state administration bodies and other regional development stakeholders included in implementation of the Strategy
20. development strategy of urban area – planning document of regional development policy which defines objectives and priorities for development of urban area
21. urban area – includes urban agglomeration, larger and smaller urban areas defined in this Act, for which development strategies of urban area is designed
22. county development strategy – planning document that defines objectives and priorities for development of the regional self-government unit
Title II
PRINCIPLES OF REGIONAL DEVELOPMENT POLICY
Solidarity and concentration
Article 4
Regional development policy is based on mutual solidarity of all citizens of the Republic of Croatia, and is particularly concentrated for additional supporting to the areas considerably lagging in comparison to national average.
Partnership and cooperation
Article 5
(1) Regional development policy is based on partnership and cooperation among public, private and civil sector, implying cooperation between state administration bodies, regional self-government unit, local self-government unit, economic subjects, scientific community, social partners and civil society organisation.
(2) Planning documents of regional development policy are adopted in consultation process with the corresponding partnership council.
Strategic planning
Article 6
Strategic planning of regional development is achieved by adopting and implementation of multi-annual planning documents.

Consolidation of financial resources
Article 7
Financing of regional development is ensured through consolidation of resources from different sources intended for preparation, designing and implementation of planning documents and development projects by which permanent and measurable impact on development is achieved.
Monitoring and evaluation
Article 8
Implementation of regional development policy shall be systematically monitored and evaluated in order to increase effectiveness, efficiency and impact on regional development.
Sustainability
Article 9
The regional development policy contributed to harmonised and balanced development of the Republic of Croatia which ensures protection and preservation of natural environment and diversity of cultural heritage.
Autonomy of local and regional self-government
Article 10
Regional development policy is conducted in accordance with autonomy of local and regional self-government units, which is guaranteed by the Constitution of the Republic of Croatia.
PART TWO
STRATEGIC PLANNING OF REGIONAL DEVELOPMENT
Planning documents of regional development policy
Article 11
(1) Planning documents of regional development policy are Strategy of Regional Development of the Republic of Croatia (hereinafter the Strategy), county development strategy and the development strategy of City of Zagreb (hereinafter county development strategy) and development strategy of urban area.
(2) Planning documents of regional development policy referred to under this Article paragraph 1 are adopted for seven-year period corresponding to multi-annual financial framework of European Union cohesion policy.
(3) National development documents and spatial plans are the grounds for drafting the planning documents of the regional development policy.
(4) Planning document of regional development policy referred to under this Article paragraph 1 at the lower level shall be in compliance with the higher level planning document of the regional development policy.
(5) Ministry responsible for regional development (hereinafter the Ministry) shall prepare long-term strategic background documents as analytical ground for management of regional development policy for the period of at least fifteen years.
Strategy of Regional Development
Article 12
(1) Strategy sets out in more detail objectives and priorities of regional development of the Republic of Croatia, methods of achieving them, areas with specific development issues, relationships and activities of state administration bodies and other regional development stakeholders included in implementation of Strategy.
(2) Strategy is adopted by Croatian Parliament upon proposal of Government of the Republic of Croatia, and the institution responsible for drafting the Strategy is the Ministry.
(3) Objectives and priorities defined in the Strategy represent guidelines for drafting strategic documents which are adopted in accordance to specific act related to Stated Budget.
(4) Implementation of the Strategy is based on multi-annual programmes for enhancement of regional development in accordance with the Strategy and this Act.
(5) Programmes referred to under this Article paragraph 4 define actions for achievement of objectives set in Strategy, financial sources, responsible bodies, indicators and other elements important for implementation, monitoring and evaluation of the programmes.
County development strategy
Article 13
(1) County development strategy is main strategic planning documents of regional self-government unit setting objectives and priorities for development of regional self-government unit with special emphasis on role of the large cities and county seats in enhancing development and on development of lagging areas.
(2) County development strategy is adopted by the regional self-government unit in accordance with partnership and cooperation principles after obtaining opinion of the county partnership council and taking into consideration the need to ensure balanced development of all parts of the county.
(3) Plan of development programmes, adopted by local and regional self-government units, in accordance with specific act related to the State Budget, shall be in line with county development strategy.
(4) Two or more regional self-government units are allowed to adopt joint development strategy in accordance to partnership principle, after obtaining opinions of the county partnership councils of counties which are preparing joint development strategy. Counties that adopt joint development strategy shall not adopt individual county development strategies.
(5) Ministry shall prepare guidelines for drafting county development strategies, monitoring and evaluation of their implementation and other related issues.
Urban areas
Article 14
(1) Urban areas are constituted with the purpose of more efficient planning, harmonising and implementation of regional development policy, particularly of the urban dimension of the policy.
(2) Urban areas are constituted as urban agglomerations, larger urban areas and smaller urban areas.
(3) Urban agglomerations are:
– Zagreb urban agglomeration, with the seat in Zagreb
– Split urban agglomeration, with the seat in Split
– Rijeka urban agglomeration, with the seat in Rijeka
–Osijek urban agglomeration, with the seat in Osijek.
(4) Local self-government units respectively towns and municipalities included in urban agglomerations are determined by the Decision of the Minister upon the proposal of the city which is the seat of the urban agglomeration, after obtaining prior opinion of all local self-government units included in agglomeration and the ministry responsible for spatial planning.
(5) Larger urban areas are towns with more than 35,000 of inhabitants according to the last Census providing they are not included in urban agglomeration referred to under this Article paragraph 3.
(6) Smaller urban areas are towns with less than 35,000 of inhabitants according to the last Census, with more than 10,000 inhabitants in central settlement or county seats.
(7) Urban areas referred to under this Article paragraphs 5 and 6 can incorporate neighbouring local self-governments units or their parts with prior approval of their representatives body.
 (8) Where two or more urban areas referred to under this Article paragraph 2 share mutual border, there are considered as single urban area.
Development strategy of urban area
Article 15
(1) Development strategy of urban area is main strategic document setting objectives and priorities for development of urban area.
(2) Institution responsible for drafting development strategy of urban area referred to under this Article paragraph 1 is the city which is the seat of urban area.
(3) In case of the single urban area referred to under Article 14 paragraph 8 of this Act, responsibility for drafting development strategy of urban areas lies on local self-government unit with larger population according to the last Census.
(4) Development strategy of urban area referred to under this Article paragraph 1 is adopted in accordance with partnership and cooperation principles after obtaining opinion of partnership council of urban area.
(5) Strategy of urban area referred to under this Article paragraph 1 is adopted by representative body which was the responsible for the preparation after obtaining the prior opinion of all self-government units forming the urban area.
(6) Ministry shall prepare guidelines for drafting development strategies of urban areas, monitoring and evaluation of their implementation and other related issues 
The Central electronic ddatabase of development projects and development indicators
Article 16
(1) In order to achieve more efficient planning and implementation of regional development policy, the Central Electronic Database of Development Projects and Development Indicators shall be established (hereinafter: Central database).
(2) Central database is established and maintained by the Ministry.
(3) Establishment and maintenance of Central database, method of entering data, type of data entered in the database and other related issues will be regulated by the Minister by an ordinance. 
PART THREE
THE INSTITUTIONAL FRAMEWORK AND MANAGEMENT
Title I
CENTRAL LEVEL
Responsible institution
Article 17
(1) The Ministry is the responsible institution for regional development policy.
(2) Other state administration bodies, relevant partnership councils and other public-legal bodies that can significantly contribute to realisation of the objectives of regional development policy also participate in preparation and implementation of regional development policy.

Regional Development Council
Article 18
(1) In order to ensure active contribution of the local and regional self-government units and scientific and professional community in enhancement of regional development policy, in accordance with partnership principles, Regional Development Council (hereinafter the Council) shall be established. 
(2) Council includes:
– representatives of the ministry responsible for regional development
– representatives of the ministry responsible for spatial planning
– representatives of regional self-government units
– representatives of regional coordinators
– representatives of local self-government units
– member of the committee responsible for regional development of the Croatian Parliament
– representatives of scientific and professional community
– representatives of other ministries or other public-legal bodies of special importance for regional development.
(3) Members of the Council are appointed by the Government of the Republic of Croatia upon the proposal of the Minister responsible for regional development. 
(4) Frequency of the Council meetings depends on the necessity, but is not less than twice a year. 
(5) Administrative and professional tasks for the Council are performed by the Ministry.
(6) Detail issues related to composition, scope and methods of Council and other issues related to the Council will be regulated by the Minister by an ordinance. 
Scope of Council
Article 19
In performing tasks from its scope the Council shall:
– monitor status and trends in regional development of the Republic of Croatia
– propose guidelines on regional development policy to ensure more balanced development of all parts of Croatia
– examine national development documents
– examine main programmes and measures for enhancement of regional development adopted pursuant to this Act
– examine impacts of programmes and measures under responsibility of other state bodies which are of special importance for more balanced regional development
– conducts other tasks designated by the Minister which are related to improvement of regional development policy
Agency for Regional Development of the Republic of Croatia
Article 20
(1) Agency for Regional Development of the Republic of Croatia (hereinafter the Agency) is public institution established by Government Regulation on establishment of the Agency for Regional Development of the Republic of Croatia (Official Gazette, 155/08, 83/12 and 111/14)
 (2) Agency referred to under this Article paragraph 1, continues in accordance with this Act, with implementation of activities which contributes to the realisation of objectives of regional development policy set in planning documents of regional development policy.
(3) In conducting tasks within its scope, Agency may take actions related to implementation of programmes and other activities for the Ministry and based on the request of the Ministry.
(4) Agency also performs other tasks in accordance to this Act, act on establishment and Statute of the Agency.
(5) Administrative supervision under Agency is performed by the Ministry.
(6) The organisation, powers and decision-making procedures and other issues relevant for performing activities and operations of the Agency are regulated in the Statute pursuant to this Act and the acts on establishment of the Agency.
Title II
LEVEL OF STATISTICAL REGION
Partnership council of statistical region
Article 21
(1) Partnership council of statistical region is established by the Government of the Republic of Croatia in accordance with partnership and cooperation principles aiming to connect stakeholder at the level of statistical region.
(2) Partnership council of statistical region is established for the purpose of defining development priorities of statistical regions, proposing strategic projects at the statistical region level and their implementation and monitoring.
(3) Based on joint initiative from at least three counties within one statistical region, Partnership council of the community of counties, acting as the sub-council of the Partnership council of statistical region, may be established. 
(4) Detail issues related to establishment, composition, scope and methods of work of Partnership council of statistical region and other related issues shall be regulated by the regulation of the Government of the Republic of Croatia.
Participation in the work of the Partnership council of statistical region
Article 22
Representatives of the state administration bodies, regional self-government units, local self-governments units, regional coordinators, economic subjects, scientific community, social partners and civil society organisation participate in work of the Partnership council of statistical region.
Development agreement
Article 23
(1) In order to facilitate implementation of this Act and more efficient coordination of regional development policy at the level of statistical region, Development agreement for at least three regional self-government units (hereinafter the Development agreement) can be concluded.
(2) Development agreement harmonises the priorities of national and county level and of the urban areas situated in the regional self-government units for which the Development agreement is concluded, defines strategic regional development projects contributing to the development of the area and plans resources for implementation of Development agreement are planned.
(3) Development agreement is concluded between the Ministry as institution responsible for regional development policy at central level, regional self-government units and large cities which are the centres of urban areas for which the Development agreement is concluded. Development agreement is based on the planning document of regional development policy referred to under Article 12 of this Act.
(4) Other state administration bodies and other public-legal bodies which can significantly contribute to the realisation of the objectives or regional development policy in the area for which the Development agreement is concluded, also may join the agreement following the invitation of the Ministry.
(5) Administrative and professional tasks related to preparation of Development agreement are conducted by the Ministry.

Title III
LEVEL OF REGIONAL SELF-GOVERNMENT
Coordination and supporting regional development at the level of regional self-government
Article 24
(1) Regional self-government unit is responsible for planning development of its own area.
(2) During planning of development, regional self-government unit cooperates with local self-government units from its own territory and other regional self-government units.
(3) For the purposes of effective coordination and supporting regional development, regional self-government establish regional development agency as public institution or company or establish administrative body (hereinafter: regional coordinator).
(4) Co-founders and co-owner of regional coordinator referred under this Article paragraph 3 may be, besides the regional self-government unit, large cities and towns which are county seats, other local self-government units and other public-legal bodies from the county.
(5) Founders and owners, respectively co-founders and co-owners, of regional coordinators shall ensure financial and other conditions for quality of work of regional coordinators.
Tasks of regional coordinators
Article 25
(1) Regional coordinators perform following tasks of general economic interest for the regional self-government unit:
– coordinate and participate in designing of county development strategies and other strategic development documents in the county area
– coordinate preparation of action plans for implementation of county development strategies
– monitor and stimulate implementation of county development strategies
– participate in coordination of designing and implementation of development strategies of urban areas and development strategies of local self-government units in the county area
– coordinate tasks related to Central database
– coordinate tasks related to enhancement of regional competitiveness and participate in task of strengthening urban development
– coordinate activities of local self-government units related to regional development and participate in preparation and implementation of local self-government units projects
– perform administrative and professional tasks related to the work of county partnership
– participate in work of county partnership and partnership council of statistical region and partnership council of urban area
– participate in preparation and implementation of development project in the responsibility of public-legal bodies implementation of which is the interest of social and economic development of county, statistical regional and the whole Croatia, particularly projects financed by structural and investments funds of European Union
– participate in preparation and implementation of joint development projects with other local and regional self-government units
– cooperates with other regional coordinators with the aim of preparation and implementation of joint projects
– cooperates in implementation of programmes of the Ministry and other central state government
– perform other tasks in accordance to the law.
(2) Besides the tasks from this Article paragraph 1, regional coordinators may perform other tasks presuming it is registered for that.
Accreditation procedure for regional coordinators
Article 26
(1) The Agency conduct accreditation procedure based on which the competence of regional coordinator for effective and efficient performance of tasks referred under Article 25 of this Act is determined.
(2) Accreditation procedure is conducted based on programme for assurance of quality of work of regional coordinators prepared by the Agency.
(3) During the accreditation procedure the Agency shall ensure independent external opinion on competences of regional coordinators for efficient performance of tasks referred to under Article 25 of this Act.
(4) Within the 60 days of initiation of accreditation procedure the Agency shall deliver justified assessment of regional coordinator competencies for efficient performance of the tasks referred under Article 25 of this Act to the Ministy.
(5) Assessment referred under this Article paragraph 4 may be positive, negative and conditional.
(6) The Ministry shall, based on assessment from this Article paragraph 4, issue the decision on regional coordinator status within one month. Decision is issued for time period in accordance with duration of multi-annual financial framework of the European Union.
(7) The decision referred to under this Article paragraph 6 is an administrative act on which complain is not allowed, but against which the administrative dispute may be initiated.
(8) In case of significant changes of performance conditions of regional coordinator which may influence efficient performing of tasks referred to under Article 25 of this Act during the period for which the accreditation is valid, the Agency shall initiate the procedure of reconsideration of accreditation.
(9) In case that decision referred to under this Article paragraph 6 declines retaining or obtaining the status of regional coordinator, regional coordinator referred to under Article 24 paragraph 3 of this Act may require reconsideration of accreditation one year after receiving the decision.
(10) Methods and criteria for conducting accreditation procedure and other issues related to this procedure will be regulated by the Minister by an ordinance.
County partnership council
Article 27
(1) Regional self-government unit establish the County partnership council (hereinafter: County partnership).
(2) County partnership is established for the purpose of participation in adopting the county development strategy, defining development priorities of its own area, proposing strategic projects relevant for development of regional self-government unit and their implementation and monitoring.
(3) County partnership is established and acts in accordance with partnership and cooperation principles, taking into consideration representation of different stakeholders from the regional self-government unit and representation of majority of population in the regional self-government unit.
(4) Large cities and county seats have their representatives in County partnership. 
(5) Administrative and professional tasks for the work of County partnership are performed by regional coordinator of regional self-government unit.
(6) Detail issues related to establishment, composition, scope and methods of work of County partnership and other related issues shall be regulated by the regulation of the Government of the Republic of Croatia.
Partnership council of urban area
Article 28
(1) Local self-government unit which is in accordance with this Act responsible for preparation of development strategy of urban area initiates establishment of Partnership council of urban area.
(2) Partnership council of urban area is established for the purpose of participation in adopting the development strategy of urban area, defining development priorities of urban area, proposing strategic projects of the urban area and their implementation and monitoring.
(3) Partnership council of urban area is established and acts in accordance with partnership and cooperation principles, taking into account representation of different stakeholder for development of urban area and representation of majority of urban area population.
(4) All self-government units within the urban area have their representatives in the Partnership council of urban area.
(5) Administrative and professional tasks for the work of Partnership council of urban area are performed by local self-government unit which is, pursuant to provision of this Act, responsible for preparation of development strategy of urban area.
(6) Detail issues related to establishment, composition, scope and methods of work of Partnership council of urban areas and other related issues shall be regulated by the regulation of the Government of the Republic of Croatia
Title IV
LEVEL OF LOCAL SELF-GOUVERMENT
Local development agency
Article 29
(1) For the purpose of effective coordination and supporting local development one or more local self-government units may establish local development agencies as public institutions or companies.
(2) Local self-government units with selected Local action group (hereinafter LAG) in its territory may conduct coordination and support of local development through the LAG.
Tasks of local development agencies
Article 30
(1) Local development agencies referred to under Article 29 of this Act perform following tasks of general economic interest:
– coordinate preparation of development strategies of local self-government units
– coordinate preparation of action plans for implementation of development strategies of local self-government units
– monitor implementation of development strategies of local self-government units
– enhance preparation of development project on the local self-government level
– participate in preparation of development project and strategic regional development project of statistical region
– cooperate with other local development agencies and regional coordinators for the purpose of preparation and implementation of joint projects
– participate in implementation of programmes of the Ministry and other state administrative bodies 
– performs other task in accordance to the law.
(2) Besides the tasks from this Article paragraph 1, local development agencies may perform other tasks persumning they are register for them.
Title V
REGISTER OF REGIONAL COORDINATORS AND LOCAL DEVELOPMENT AGENCIES
Article 31
(1) The Ministry establishes and maintains Register of regional coordinators and local development agencies (hereinafter the Register).
(2) Content and maintenance of the Register referred to under this Article paragraph 1 and other relevant issues will be regulated by the Minister by an ordinance.
(3) Ministry responsible for agriculture shall deliver data on registration of LAGs in its own registers as information to the Ministry.
PART FOUR
ASSESSMENT AND CLASSIFICATION OF LOCAL AND REGIONAL SELF-GOVERNMENT UNITS ACCORDING TO DEVELOPMENT LEVEL AND ASSISTED AREAS
Title I
ASSESSMENT AND CLASSIFICATION OF LOCAL AND REGIONAL SELF-GOVERNMENT UNITS ACCORDING TO DEVELOPMENT LEVEL
Development index
Article 32
(1) Development level assessment of the local and regional self-government units is based on the development index.
(2) Indicators for calculating development index, methods of calculation of development index, share of each indicator in total value of development index and other related issues are regulated by the Government’s regulation.

Assessment and monitoring of development level
Article 33
(1) The assessment of development level of local and regional self-government units is carried out by the Ministry on the basis of development index referred to under Article 32 of this Act.
(2) The development assessment referred to under this Article paragraph 1 is carried out every five years.
(3) Upon request of the Ministry, state administration bodies and other public-legal bodies shall deliver data from registers or other records which they maintain, for the purpose of calculating development level of local and regional self-government units.
(4) The Ministry shall publish data on calculation of development level referred to under this Article paragraph 1 on its website.
(5) The Ministry continuously monitors development level of local and regional self-government units.
Classification of regional self-government units according to development level
Article 34
(1) Regional self-government units shall be classified according to development index referred to under Article 32 of this Act as follows:
– 1^st group of regional self-government units with development index under 75% of the average of the Republic of Croatia
– 2^nd group of regional self-government units with development index from 75% but less then 100% of the average of the Republic of Croatia
– 3^rd group of regional self-government units with development index from 100% but less than 125% of the average of the Republic of Croatia
 – 4^th group of regional self-government units with development index of 125% or higher of the average of the Republic of Croatia
(2) Assessment of regional self-government units according to development level is carried out every five years in accordance with assessment referred to under Article 33 of this Act.
Classification of local self-government units according to development level
Article 35
(1) Local self-government units shall be classified according to development index referred to under Article 32 of this Act as follows: 
– 1^st group of local self-government units with development index under 50% of the average of the Republic of Croatia
– 2^nd group of local self-government units with development index from 50% but less than 75% of the average of the Republic of Croatia
– 3^rd group of local self-government units with development index from 75% but less than 100% of the average of the Republic of Croatia
– 4^th group of local self-government units with development index from 100% but less than 125% of the average of the Republic of Croatia 
– 5^th group of local self-government units with development index of 125% and higher of the average of the Republic of Croatia
(2) Assessment of local self-government units according to development level is carried out every five year in accordance with assessment referred to under Article 33 of this Act.
Title II
ASSISTED AREAS
Determination of assisted areas
Article 36
The status of assisted areas shall be acquired by:
– regional self-government unit classified under the 1^st group of regional self-government units referred to under Article 34 paragraph 1 of this Act
– local self-government unit classified under the 1^st or the 2^nd group of local self-government units referred to under Article 35 paragraph 1 of this Act
Decision on classification according to development level
Article 37
(1) Decision on classification of local and regional self-government units according to development level shall be adopted by the Government of the Republic of Croatia upon the proposal of the Ministry and based on calculation of development index referred to under Article 34 and 35 of this Act.
(2) Decision referred to under this Article paragraph 1 is adopted after the calculation referred to under Article 33 of this Act shall enter into force on the 1^st January of the following year and shall be published on the website of the Ministry.
The transitional exclusion period
Article 38
(1) For the regional self-government units which pursuant to provision of Article 34 paragraph 2 and local self-government units which pursuant to provision of Article 35 paragraph 2 of this Act do not meet conditions for retaining the status of assisted areas, assistance from the State Budget during the transitional period will be ensured for no longer than three years from the date on which Decision referred to under Article 37 of this Act enters into force.
(2) Level and methods of providing assistance in transitional period referred to under this Article paragraph 1, shall be prescribed by specific act related to execution of the State Budget. 

PART FIVE
ENHANCEMENT OF REGIONAL COMPETITIVENESS AND URBAN DEVELOPEMNT
Programme for enhancement of regional competitiveness and urban development
Article 39
(1) Government of the Republic of Croatia shall adopt the Programme for enhancement of regional competitiveness and urban development (hereinafter the Competitiveness programme) for a four year period upon the proposal of the Ministry and with prior opinion of the ministry responsible for economy and the ministry responsible for spatial planning.
(2) The Competitiveness programme is adopted based on the Strategy of Regional Development of the Republic of Croatia, results of regional competitiveness index and other relevant strategical and analytical documents at national and regional level.
(3) The Competitiveness programme determines measures for enhancement regional competitiveness and urban development, institution responsible for implementation of measures, financial resources, methodology for monitoring and reporting on progress of individual measures.
(4) On the grounds of the Competitiveness programme referred to upon this Article paragraph 1, the Ministry shall adopt annual implementation plan of Competitiveness Programme not later than one month after the State Budget for specific year is adopted.
(5) Annual implementation plan of the Competitiveness programme contains plan of realisation of measures for enhancement of regional competitiveness and urban development to be implemented during the year for which the Plan is adopted, activities, necessary recourses, sources and methods of utilisation of resources for realisation of annual plan.
(6) Resources for implementation of annual implementation plan of the Competitiveness programme are ensured in State Budget and other sources pursuant to the law.
(7) Report on execution of implementation of the Competitiveness programme referred to under this Article paragraph 1 shall be submitted by the Ministry to the Government of the Republic of Croatia every two years.

PART SIX
MEASURES FOR DEVELOPMENT OF ASSISTED AREAS AND OTHER AREAS WITH SPECIFIC DEVELOPMENT ISSUES
Programme of sustainable social and economic development of assisted areas and other areas with specific development issues
Article 40
(1) The Government of the Republic of Croatia shall adopt the Programme of sustainable social and economic development of assisted areas and other areas with specific development issues (hereinafter the Programme for assisted areas) upon the proposal of the Ministry for a four year period.
(2) The Programme for assisted areas defines measures and projects for enhancing development of assisted areas and other areas with specific development issues, institutions responsible for measures and projects, implementation activities, resources and methodology for monitoring and evaluation of individual measures.
(3) Based on the Programme for assisted areas referred to under this Article paragraph 1, the Ministry shall adopt annual implementation plan of the Programme for assisted areas, not later than one month after the State Budget for specific year is adopted.
(4) Annual implementation plan of the Programme for assisted areas includes plan of implementing individual supporting measures, activities and projects, necessary resources, sources and methods of using the resources.
(5) Resources for implementation of annual implementation plan of the Programme for assisted areas are secured in State Budget and from other sources pursuant to the law. 
(6) Report on execution of implementation of the Programme for assisted areas referred to under this Article paragraph 1 is submitted by the Ministry to the Government every two years.
Measures and projects for development of assisted areas and other areas with specific development issues
Article 41
(1) Measures and projects for development of assisted areas and other areas with specific development issues are defined in the Programme for assisted areas and by provisions of this Act and other acts containing provisions focused on supporting development of assisted areas and other areas with specific development issues.
(2) While planning measures and project within the scope of their jurisdiction, state administration bodies shall, depending on nature of measures and available financial resources, specially consider the impact of individial measure on development of assisted areas and other areas with specific development issues taking into consideration development level of those areas pursuant to decision on classification of local and regional self-government units referred to under Article 37 of this Act and specific development issues by which the certain areas are defined.
(3) The Ministry is responsible for monitoring of implementation of provisions under this Article paragraph 2 by the state administration bodies.
Assistance for co-financing preparation and implementation of projects
Article 42
(1) The Ministry shall, in accordance with available funds, ensure professional and financial assistance for preparation of development projects in assisted areas and other areas with specific development issues, for implementation of which the resources from european structural and investments funds are planed to be used.
(2) The Ministry shall, in accordance with available funds, ensure resources for co-financing the implementation of development projects in assisted areas and other areas with specific development issues, which are mainly financed by european structural and investments funds.
(3) Level and methods of providing assistance for co-financing preparation and implementation of projects shall be determined in special programme adopted by the Minister by the decision.
Income from Profit tax
Article 43
(1) Income from Profit tax realised in the areas of local self-government units classified under 1^st and 2^nd group referred to under Article 35 paragraph 1, which is an income of central state, shall be paid to those units as an aid from the State Budget in the amount of profit tax realised in their area during the year prior to the year in which budget is prepared, with the exception of the units obtaining the status of assisted areas for the first time.
(2) Local self-government units obtaining the status of assisted areas for the first time, in the sense of this Article paragraph 1, are those local self-government units which had no prior status of areas of special state concern for their whole territory or the status of hilly-mountainous areas and are classified under 1^st and 2^nd group by the Decision on classification of local and regional self-government unit according to development level (Official Gazette, No 158/13)
(3) Aid referred to under this Article paragraph 1 shall be paid to the local self-government units obtaining status of assisted areas for the first time as follows: 
– for the first year of applying the status of assisted area the local self-government unit is entitled to aid in amount of 30% of incomes realised as Profit tax in its own area in the year prior to the year in which budget is prepared
– for the second year of applying the status of assisted area the local self-government unit is entitled to aid in amount of 50% of incomes realised as Profit tax in its own area in the year prior to the year in which budget is prepared
– for the third year of applying the status of assisted area the local self-government unit is entitled to aid in amount of 75% of incomes realised as Profit tax in its own area in the year prior to the year in which budget is prepared
– for the fourths and each following years local self-government unit is entitled to aid in amount of total incomes realised as Profit tax in its own area in the year prior to the year in which budget is prepared
(4) Purpose of utilisation the aid referred to under this article paragraph 1 shall be determined by act that regulates the State Budget execution.
Compensation for exploitation of minerals
Article 44
Compensation for exploitation of minerals for production of construction material in the local self-government units classified under 1^st and 2^nd group referred to under Article 35 paragraph 1 of this Act, which is an income of the State Budget of the Republic of Croatia, shall be transferred to the towns or municipalities in the amount of 50% and to the county in the amount of 50% and shall be dedicated to nature and environment protection and economic development. 
Compensation for protected areas of nature
Article 45
(1) When protected area of nature, managed by public institution in accordance to specific act, is registered in the territory of local self-government unit determined as assisted area and it generates the annual net income from entrance fees paid by visitors of protected area higher than 15,000,000.00 kunas, local self-government units are entitled to financial compensation from the public institution managing the protected area of nature.
(2) Entitlement to the compensation also applies to the local self-government units not determined as assisted area stipulating that their development index is bellow 100% and that at least 25% of its area is registered as protected area of nature under jurisdiction of public institution which generates income from entrance fees paid by visitors of protected area of nature higher than 15,000,000.00 kunas
(3) The compensation is secured from annual net income generated by the public institution responsible for management of protected area of nature from entrance fees paid by visitors of protected area of nature.
(4) The amount of the compensation is based on annual net income generated by public institution from entrance fees paid by visitors of protected area of nature and the surface of local self-government unit registered as protected area of nature. Total annual compensation can not be higher than 6.5% of net income generated from the entrance fees paid by visitors of protected area of nature in the current year.
(5) Resources referred to under this Article paragraph 1 shall be dedicated to local self-government unit for projects related to nature and environment protection, social infrastructure development, economic growth and sustainable development.
(6) Amount of the compensation, methods of payment and eligible expenses related to projects referred to under this Article paragraph 5 shall be regulated by the Decision of the Government of the Republic of Croatia upon the proposal of the Ministry and with prior opinion of the ministry responsible for nature protection.
(7) Ministry responsible for regional development in cooperation with ministry responsible for nature protection shall ensure effective supervision of using resources referred to under this Article. If during the supervision non-compliance in utilisation of resources with this Article paragraph 5 is determined, the Ministry shall withhold further payments of compensation and request reimbursement of all expenses not in line with this Article paragraph 5.
Housing in assisted areas and other areas with specific development issues
Article 46
(1) The Republic of Croatia shall support returning, retention of population in assisted areas and areas with specific development issues and immigration of Croatian citizens of all professions, particularly those whose activities may contribute to economic and social development of aforementioned areas.
(2) Issues related to housing, housing programme, institution relevant for implementation of measures from the programme, implementation actions, resources and methodology for monitoring the implementation and evaluation of individual measures, shall be regulated by specific act on housing.
PART SEVEN
MONITORING, EVALUATION AND REPORTING
Monitoring
Article 47
(1) The Ministry monitors implementation of regional development policy and its impacts on development of all parts of the Republic of Croatia, while the responsible state administration bodies monitor implementation under their jurisdiction and its impact on development of all parts of the Republic of Croatia.
(2) State administrative bodies shall deliver, upon the request of the Ministry, data from registers and other data necessary for monitoring referred to under this Article paragraph 1.
Evaluation
Article 48
(1) Planning documents of regional development policy shall be evaluated during drafting, implementation and after implementation.
(2) Procedures for evaluation referred to under this Article paragraph 1 is based on process of assessing the impact of implemented measures on development.
(3) Procedure and methods for evaluation of regional development policy shall be regulated in detail by the Minister by an ordinance.
Reporting
Article 49
(1) State administration bodies and other public-legal entities, as well as companies owned by Republic of Croatia, shall submit to the Ministry the report on impacts of implementation of programmes under their jurisdiction with impact on regional development for the previous year, not later than by 30 April of the current year.
(2) Ministry shall deliver report referred to under this Article paragraph 1, to the county to which the report applies, not later that by 31 May of the current year.
(3) County shall deliver annual report on results of implementation of county development strategy to the Ministry for the previous year, not later than by 31 July of the current year.
(4) Large city which is responsible for drafting development strategy of urban area shall submit the report on results of implementation of development strategy of urban area to the Ministry for the previous year, not later than by 31 July of current year.
(5) The Ministry shall submit report on results of implementation of regional development policy to the Government for the previous year, not later than by 1 November of the current year.
(6) The Government of Republic of Croatia shall submit to the Croatian Parliament the report on results of implementation of regional development policy for the previous year, not later than by 1 December of the current year.
Implementation and supervision
Article 50
(1) This Act is implemented by responsible ministries, each in the scope of their jurisdiction pursuant to specific act.
(2) Supervision of implementation of this Act and subordinate acts shall be done by the Ministry.
PART EIGHT
TRANSITIONAL AND FINAL PROVOSIONS
Adoption of subordinate legislation
Article 51
(1) The Government of Republic of Croatia shall adopt the Regulation referred to under Article 21 paragraph 4, Article 27 paragraph 6 and Article 28 paragraph 6 of this Act within 90 days from the date of entry into force of this Act.
(2) The Government of Republic of Croatia shall adopt the Regulation referred to under Article 32 paragraph 2 of this Act not later than 18 months before assessment referred to under Article 33 of this Act.
(3) The Government of Republic of Croatia shall adopt the Decision referred to under Article 45 paragraph 6 of this Act within 90 days from the date of entry into force of this Act.
(4) The Minister shall adopt the Decision referred to under Article 14 paragraph 4 of this Act within 90 days from the date of entry into force of this Act.
(5) The Minister shall adopt the Ordinance referred to under Article 16 paragraph 3 of this Act within 90 days from the date of entry into force of this Act.
(6) The Minister shall adopt the Ordinance referred to under Article 18 paragraph 6 of this Act within 90 days from the date of entry into force of this Act.
(7) The Minister shall adopt the Ordinance referred to under Article 26 paragraph 10 of this Act within 90 days from the date of entry into force of this Act.
(8) The Minister shall adopt the Ordinance referred to under Article 31 paragraph 2 of this Act within 90 days from the date of entry into force of this Act.
(9) The Minister shall adopt the Ordinance referred to under Article 48 paragraph 3 of this Act within 90 days from the date of entry into force of this Act
(10) The Ministry shall prepare the Guidelines referred to under Article 13 paragraph 5 of this Act within 90 days from the date of entry into force of this Act
(11) The Ministry shall prepare the Guidelines referred to under Article 15 paragraph 6 of this Act within 90 days from the date of entry into force of this Act
(12) The Ministry shall prepare the long-term strategic background documents referred to under Article 11 paragraph 4 of this Act within 18 months from the date of entry into force of this Act.
(13) Statute of the Agency and other acts of the Agency referred to under Article 20 of this Act shall be aligned to provision of this Act not latter than 6 months from the date of entry into force of this Act.
Expiry of legislation
Article 52
(1) On the day of entry into force of this Act, Act on regional development of the Republic of Croatia (Official Gazette No 153/09) and all subordinary legislation shall cease to have effect.
(2) As an exception from this Article paragraph 1, Regulation on development index (Official Gazette No 63/10 and 158/13) shall be into force until new Regulation referred under Article 51 paragraph 2 of this Act enters into force.
(3) As an exception from this Article paragraph 1, Decision on classification of local and regional self-government units according to development level (Official Gazette No 158/13) shall be in force five years from the day of entry into force of this Act.
Entry into force
Article 53
This Act shall be published in the Official Gazette and shall enter into force on 1 January 2015.
Class: 022-03/14-01/146
Zagreb, 2 December 2014
THE CROATIAN PARLIAMENT
President of
the Croatian Parliament
Josip Leko, m. p.

Zakon o regionalnom razvoju Republike Hrvatske (NN 147/14)