It was created by four acts of the Commonwealth Parliament in 1988, including the Australian Capital Territory (Self-Government) Act 1988. The first election was held on 4 March 1989 and the assembly first sat on 11 May that year. Until this point, the ACT had been directly administered by the Commonwealth Government. It replaced the House of Assembly (also known for a period as the Legislative Assembly), which existed from 1976 to 1986, but had no executive power, with a principal function of advising the Commonwealth on matters relating to the Territory.
Members of the Legislative Assembly vote to elect a Chief Minister—in practice, the leader of whichever party can form government. The Chief Minister, in turn, selects up to five ministers to form a cabinet. The leader of the second-largest party in the assembly usually becomes the Leader of the Opposition.
The ACT is unique among Australian states and territories, as it has no vice-regal post exercising authority as the representative of the Head of State, such as a Governor or an Administrator. The Governor-General of Australia serves as the representative of the Crown in the ACT. However, the functions of the head of the Executive—commissioning government, proroguing parliament and enacting legislation—are exercised by the Assembly itself and by the Chief Minister. Instead of vice-regal or regal assent, a Bill passed by the ACT Legislative Assembly is enacted on "notification"—publication in the Government Gazette of a notice authorised by the Chief Minister.
Election dates for the Assembly are fixed in legislation, with elections held in October every four years (until 1997, elections were held in February). Elections are always held on Saturdays. The term of the Assembly was increased in 2004 from three to four years.
As with the Northern Territory Legislative Assembly, the ACT Legislative Assembly lacks the full powers of a state legislature. For example, legislation passed by the Assembly can still be overridden by Australian Commonwealth legislation under the Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Bill 2011. Although this is rare in practice, the Civil Unions Act, which allowed same-sex couples to enter into "civil unions" was overruled following concerns that the civil unions mimicked marriage. In July 2006, the Federal Government again threatened to overrule the ACT Stanhope Government's anti-terror legislation, which was not consistent with other state laws. The Commonwealth also retained control of the Territory's justice system until handing it over to the Assembly in 1992.
Unlike the legislatures of the other mainland states and territories, the Assembly also has the functions of a local council; the city of Canberra has no other local government.