This paper treats some points of issue on decentralization in governmental fiscal relations of Japan. In my last paper, I studied the interim report of the decentralization promoting committee which was published in March, 1996. On the 20th of December, 1996, the first report of this comittee appeared, and some concrete plans to classifY Kikanininjimu into 'jichi-jimu' and 'h6teijutaku-jimu' were proposed by this committee. In this paper, we investigate whether these plans of classification are proper or not. We also discuss the recent policy of communal unification proposed by a group of citizens, and point out some questions from the viewpoint of local autonomy and of decentralization. We admit the significance of this first report of the committee, and yet we have to emphasize again that the task of decentralization depends heavily on the reform to strengthen communal financial position.