passport that goes with it. Parliament will be informed of the results of the exercise in due course. The response so far has been favourable, and the Government are confident that the new status will receive widespread international acceptance.
17. On 11 April 1986, Memoranda were exchanged between the British Embassy in Peking and the Chinese Ministry of Foreign Affairs recording the agreement reached on the terms of a right of abode endorsement to be entered in the passports of British Nationals (Overseas). This endorsement will indicate the holder's right to return to Hong Kong and thus make the British National (Overseas) passport more readily acceptable for international travel before and after 1997.
(e) Drafting of the Basic Law of the Hong Kong Special Administrative Region 18. Under paragraph 3(12) of the Joint Declaration the policies of the People's Republic of China regarding Hong Kong, which are set out in paragraph 3 of the Joint Declaration, and the elaboration of them in Annex I to the Joint Declaration are to be stipulated in a Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China by the Chinese National People's Congress. The Basic Law Drafting Committee appointed by the National People's Congress has met on three occasions in Peking. Twenty-three of its 59 members come from Hong Kong. Five Special Groups have been established to consider particular areas of the Basic Law. Mainland members of the Special Groups have made study tours to Hong Kong where they have consulted a wide range of individuals and groups. The Special Groups have made progress reports to the full Basic Law Drafting Committee. It is expected that on the basis of these reports the Drafting Committee will, in the course of 1987, consider drafts of individual articles of the Basic Law. A full draft is due to be published in 1988.
19. The Basic Law Consultative Committee in Hong Kong has also been active in collecting the views of the Hong Kong people and reflecting these to the Basic Law Drafting Committee.
20. Her Majesty's Government welcome the steps taken by the Chinese Government to consult the people of Hong Kong on a wide basis on the drafting of the Basic Law, and will continue to follow the drafting process closely.
V. Representative Government
21. Last year's report described in some detail the historical background to the development of representative government in Hong Kong, which is now structured on a framework of three separate but inter-connected tiers: District Boards, Municipal Councils and the Legislative Council.
22. The District Boards are advisory bodies established in each of the 19 urban and New Territories administrative districts. Some two-thirds of District Board members are directly elected, on the basis of a franchise which includes all adults over the age of 21 years who have resided in Hong Kong for a minimum of seven years. The remaining third of members are appointed by the Hong Kong Government.
23. The Municipal Councils, comprising the Urban and Regional Councils, are financially autonomous bodies with a range of statutory responsibilities for the provision of municipal services such as public cleansing, licensing restaurants and markets and the provision and management of recreational, cultural and sporting facilities. The Urban Council's authority extends over Hong Kong Island and Kowloon; that of the Regional Council, which was formally constituted on 1 April 1986, over the New Territories. Both Councils include elected and appointed members. To maintain close connections between district and regional levels of representative government, members of the Urban Council sit as members of District Boards, whilst the New Territories District Boards elect members to sit on the Regional Council.
24. The principal functions of the Legislative Council are to enact legislation and control the expenditure of public funds. The Council questions the Administration on matters of public interest and debates its proposals in regard to policy. Until 1985 the Council consisted of appointed members only. Following the principles laid down in the
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