Taking the content of these five viable recommendations together, the Diet enacted the
Omnibus Law of Decentralization in July 1999, which took effect in April 2000. The
legislative process was complex in the extreme, with 475 laws, 440 cabinet orders, 507
ministerial orders, and 186 public notices. The eight major components of the law are: the
clarification of the roles of the state and local governments; the abolition of the ADF system;
deregulation of the jurisdiction of local affairs; the creation of mechanisms for mediating
disputes between central and local governments; the devolution of sixty-four functions; the
creation of “special cities” with populations of over 200,000 that would enjoy still greater
devolution from prefectures; the deregulation of requirements for establishing offices and
organizations in local governments; the consolidation of grants-in-aid and an increase in the
discretionary taxing power of local governments.
Reform of the local government system touches on three areas. The first is the
overhauling of the basic framework of local authorities’ functions. In addition to abolition of
the ADF system, the law stipulates a new classification of local functions either as those that
are autonomous or those that are entrusted by law. The latter are defined as functions
administered by local governments but regulated by national law or cabinet order to ensure
proper implementation.