Law 13/2014 of 14 July on the Transformation of the Fund for the Financing of Payments to Suppliers

OFFICIAL STATE GAZETTE No. 171 Tuesday, July 15, 2014 Sec. I. Page 55450 I. GENERAL PROVISIONS THE HEAD OF STATE 7468 Law 13/2014, of July 14, on the transformation of the Fund for the Financing of Payments to Suppliers.

FELIPE VI KING OF SPAIN

To all who see and understand this document. Know ye: That the General Courts have approved and I hereby sanction the following law:

PREAMBLE

Royal Decree-Law 7/2012, of March 9, creating the Fund for the Financing of Payments to Suppliers, established the Fund for the Financing of Payments to Suppliers as a management instrument for this extraordinary financing mechanism for Territorial Administrations. Since its creation, through its three successive phases articulated by Royal Decree-Law 4/2012, of February 24, determining information obligations and procedures necessary to establish a financing mechanism for payments to suppliers of local entities; Royal Decree-Law 7/2012, of March 9, creating the Fund for the Financing of Payments to Suppliers; Royal Decree-Law 4/2013, of February 22, on measures to support entrepreneurship and stimulate growth and job creation; and Royal Decree-Law 8/2013, of June 28, on urgent measures against public administration delinquency and support for local entities with financial problems, the Fund has mobilized more than 41,000 million euros, contributing significantly to injecting liquidity into businesses and self-employed individuals, reducing public administration delinquency, sustaining fundamental public services managed by Autonomous Communities and Local Entities, and, through adjustment plans associated with the mechanism, improving the financial and budgetary situation of the adhering administrations.

The aforementioned Royal Decree-Law 7/2012, of March 9, configured the Fund for the Financing of Payments to Suppliers as a public law entity, granting it its own legal personality and capacity to act as a specific instrument for issuing and raising financing in financial, banking, and capital markets.

This Law modifies the aforementioned legal regime of the Fund to adapt it to the new situation, as in February 2014 the last phase of the mechanism was completed and no new phases are expected to be activated, thereby reinforcing the extraordinary nature of the measures adopted to date. The agility in adapting administrative structures to new management needs responds to an effort of permanent evaluation oriented towards the optimization of public resource management, which allows for cost reduction, increased efficiency in management procedures, and improvement of the governance frameworks that articulate public policies.

The transformation process is articulated through the extinction of the Fund for the Financing of Payments to Suppliers and the assumption of the financial debts of the extinct Fund, which, pursuant to Article 4 of Royal Decree-Law 7/2012, of March 9, creating the Fund for the Financing of Payments to Suppliers, enjoy the explicit, irrevocable, unconditional, and direct guarantee of the State vis-à-vis third parties, by the General Administration of the State integrating its management, as well as the resulting treasury, into the general strategy and procedures of the Public Treasury.

The assets of the Fund for the Financing of Payments to Suppliers, constituted essentially by the credit rights of the Fund against Local Entities and Autonomous Communities, are also assumed by the General Administration of the State, integrating, as a non-monetary contribution, into a fund without legal personality under Article 2.2 of Law 47/2003, of November 26, General Budgetary Law, which will be called the Fund for the Financing of Payments to Suppliers 2 and will be attached to the Ministry of Finance and Public Administrations. By universal succession, the remaining rights and obligations derived from the extinct Fund, as well as the relevant consideration as an extraordinary financing mechanism for all purposes of the provisions of Organic Law 2/2012, of April 27, on Budgetary Stability and Financial Sustainability, will correspond to the latter. The new fund without legal personality remains attached to the Ministry of Finance and Public Administrations, integrating its management into the general procedures of this Ministry in matters of financial relations with Territorial Administrations.

Chapters I and II regulate the object of this Law and the creation and legal regime of the Fund for the Financing of Payments to Suppliers 2.

The constitution of the Fund for the Financing of Payments to Suppliers 2 does not require a monetary contribution, being initially endowed with a non-monetary contribution consisting of the entire asset formed by the ownership of credit rights against Autonomous Communities and Local Entities held by the Fund for the Financing of Payments to Suppliers at the time of its extinction, in whose legal position it is substituted. These assets generate cash flows from the collection of interest and repayments of loans granted to cover its operating and management expenses. The returns generated by the Fund, after deducting management expenses, will be deposited annually into the Public Treasury.

Chapter III regulates the process of extinction and liquidation of the Fund for the Financing of Payments to Suppliers by the assumption by the General Administration of the State of its assets and assigning the responsibility for managing its main asset blocks to the bodies of the General Administration of the State competent in the matter for their integration into their respective general management procedures.

Chapter IV regulates the characteristics of the credit rights of the operations, maintaining the withholdings of the financing systems of the Autonomous Communities and Local Entities as guarantee for the Fund under the same terms as the extinct Fund for the Financing of Payments to Suppliers.

Finally, the Law contains one additional provision, one repealing provision, five final provisions, and two annexes.

CHAPTER I General Provisions

Article 1. Object. The object of this Law is to extinguish and liquidate the Fund for the Financing of Payments to Suppliers, creating for this purpose the Fund for the Financing of Payments to Suppliers 2, without legal personality, and defining its legal regime as a new management instrument for the credit rights of the Fund that is extinguished.

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OFFICIAL STATE GAZETTE No. 171 Tuesday, July 15, 2014 Sec. I. Page 55451

CHAPTER II Creation and legal regime of the Fund for the Financing of Payments to Suppliers 2

Article 2. Creation of the Fund for the Financing of Payments to Suppliers 2.

1. The Fund for the Financing of Payments to Suppliers 2 is created as a fund without legal personality provided for in Article 2.2 of Law 47/2003, of November 26, General Budgetary Law, with the purpose of managing credit rights and obligations, other than those referred to in paragraphs 2 and 3 of Article 9 of this Law, of the Fund for the Financing of Payments to Suppliers that is extinguished. As universal successor to the Fund for the Financing of Payments to Suppliers, the Fund for the Financing of Payments to Suppliers 2 has the consideration of an additional financing mechanism referred to in the First Additional Provision of Organic Law 2/2012, of April 27, on Budgetary Stability and Financial Sustainability, which shall apply to it.
2. The Fund will be attached to the Ministry of Finance and Public Administrations through the State Secretariat for Public Administrations, to whom, without prejudice to what is established in Articles 5 and 9, the exercise of the rights and the fulfillment of the obligations of the Fund will correspond.

Article 3. Economic resources of the Fund for the Financing of Payments to Suppliers 2.

1. The Fund for the Financing of Payments to Suppliers 2 is initially endowed with a non-monetary contribution consisting of an asset set formed by the ownership of credit rights against Autonomous Communities and Local Entities held by the Fund for the Financing of Payments to Suppliers at the time of its extinction, in whose legal position the Fund for the Financing of Payments to Suppliers 2 is substituted for all purposes. The credit rights thus integrated will be at the accounting value they had in the contributing entity at the time of making the contribution.
2. The credit rights that are integrated into the assets of the Fund for the Financing of Payments to Suppliers 2 will be structured into three compartments referring, respectively, to Local Entities, Autonomous Communities adhering to the Autonomous Liquidity Fund, and Autonomous Communities not adhering to the Autonomous Liquidity Fund. The credit rights of the Fund for the Financing of Payments to Suppliers 2 corresponding to the compartment of Autonomous Communities adhering to the Autonomous Liquidity Fund may be integrated into the assets of the Autonomous Liquidity Fund by Order of the Minister of Finance and Public Administrations.
3. The returns of any nature generated by the Fund, after deducting management expenses, will be deposited annually into the Public Treasury.
4. The General State Budget Law of each fiscal year will determine the maximum amount of management expenses that the Fund may incur, which will include expenses derived from the assumed obligations of the extinct Fund. For these purposes, the maximum amount of management expenses that the Fund may incur in the 2014 fiscal year amounts to 23,710 thousand euros. This amount may be modified by resolution of the State Secretariat for Budgets and Expenses.

Article 4. Economic-financial regime.

1. The budgetary, economic-financial, accounting, and control regime of this Fund shall be that provided for in Law 47/2003, of November 26, General Budgetary Law, for funds without legal personality whose endowment is made mainly from the General State Budgets, mentioned in Article 2.2 of said Law.

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OFFICIAL STATE GAZETTE No. 171 Tuesday, July 15, 2014 Sec. I. Page 55452 2. The formulation, availability, approval, and accountability of the Fund for the Financing of Payments to Suppliers 2 correspond to the State Secretariat for Public Administrations.

Article 5. Management of the Fund for the Financing of Payments to Suppliers 2.

1. The management of the Fund by the Official Credit Institute (ICO) is assigned. Under this, among other functions, the Official Credit Institute will manage, on behalf and in the name of the Spanish Government, and on account of the State, the corresponding loan policies subscribed resulting from the assumption of the assets of the extinct Fund with Autonomous Communities and Local Entities, formalize modifications to existing ones, and manage modified policies, pursuant to the mandatory instruction of the Government Delegate Commission for Economic Affairs, upon proposal of the Ministry of Finance and Public Administrations and the Ministry of Economy and Competitiveness. Likewise, it will provide technical instrumentation, accounting, cash, payment agent, monitoring, and, in general, all those services of a financial nature related to operations authorized from the Fund for the Financing of Payments to Suppliers 2, without prejudice to the competencies established in matters of control in Law 47/2003, of November 26, General Budgetary Law, and other current regulations.
2. Annually, charged to the Fund for the Financing of Payments to Suppliers 2 and prior authorization by Agreement of the Government Delegate Commission for Economic Affairs, the Official Credit Institute will be compensated for the costs incurred in the development and execution of its functions, through the payment of the corresponding economic compensation.

Article 6. Information obligations.

1. Quarterly, the Official Credit Institute must remit to the General Secretariat of Treasury and Financial Policy, the State Secretariat for Budgets and Expenses, and the State Secretariat for Public Administrations, the same information regarding the amounts, duly reconciled with the treasury and accounting statements of the Fund, corresponding to interest collected and accrued and to amortization quotas collected and pending collection, due and undue, as well as intermediate accounting statements regarding its economic and financial situation. Likewise, information regarding the expected cash flows of the Fund for the quarters of the current and following fiscal years will be sent.
2. For the purposes of its consideration in the process of elaborating the General State Budgets and the State Debt Program of each year, the information referred to the first half-year will be sent before September 1.

Article 7. Extinction of the Fund for the Financing of Payments to Suppliers 2. The Council of Ministers, once the credit operations with Autonomous Communities and Local Entities have been liquidated and prior report from the Government Delegate Commission for Economic Affairs, may agree on the liquidation and extinction of the Fund for the Financing of Payments to Suppliers 2.

CHAPTER III Extinction and liquidation of the Fund for the Financing of Payments to Suppliers

Article 8. Extinction and liquidation.

1. The Fund for the Financing of Payments to Suppliers is extinguished and liquidated.
2. The liquidation will take place through the integration of all rights and obligations of the Fund for the Financing of Payments to Suppliers into the General Administration of the State through the Fund for the Financing of Payments to Suppliers 2, except for obligations derived from borrowing operations and the treasury that integrate directly into the General Administration of the State under the terms provided in Article 9. This integration takes place in a single act at the moment of entry into force of this Law in favor of the General Administration of the State, which succeeds it universally in all its rights and obligations.
3. For the purposes of Article 138.6 of Law 47/2003, of November 26, General Budgetary Law, the accounting officer of the extinct Fund for the Financing of Payments to Suppliers will be the State Secretariat for Public Administrations.

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OFFICIAL STATE GAZETTE No. 171 Tuesday, July 15, 2014 Sec. I. Page 55453

Article 9. Subrogation in legal relations.

1. The General Administration of the State is automatically subrogated in all legal relations that, on the date of entry into force of this Law, the extinct Fund for the Financing of Payments to Suppliers had with its creditors, both principal and accessory.
2. The General Administration of the State assumes the debt of the Fund for the Financing of Payments to Suppliers, subrogating itself in the rights and obligations derived from the borrowing operations subscribed by the extinct Fund and listed in Annex II. This subrogation does not alter the financial conditions of the assumed obligations nor can it be understood as a cause for resolution of legal relations. The management of this financial debt assumed by the General Administration of the State will correspond to the General Secretariat of Treasury and Financial Policy in accordance with the procedures established generally for State debt. The amount corresponding to financial expenses and principal amortizations of the financial borrowing operations subscribed by the Fund for the Financing of Payments to Suppliers with financial entities assumed by the General Administration of the State will be paid from the General State Budgets. Regarding financial expenses, the General Administration of the State will assume the total amount of interest accrued up to any of the payment dates that occur after the entry into force of this Law, regardless of whether part of those interests may have accrued prior to said date. The borrowing operations subscribed by the Fund for the Financing of Payments to Suppliers with the General Administration of the State are extinguished by confusion of debtor and creditor. Any reciprocal legal relationship existing between the General Administration of the State and the Fund for the Financing of Payments to Suppliers will also be extinguished by confusion.
3. The treasury of the Fund for the Financing of Payments to Suppliers integrates into the treasury of the General Administration of State from the moment of its extinction. Likewise, the General Administration of the State assumes ownership of the short-term financial instruments or securities in which the aforementioned Fund had applied its treasury, without it being necessary to disinvest or amortize them before their maturity. The management of such instruments will correspond to the General Secretariat of Treasury and Financial Policy through the procedures established generally for the management of the treasury of the General Administration of the State.

Article 10. Custodian of documentation. The State Secretariat for Public Administrations will be the custodian of all accounting, commercial, and administrative documentation corresponding to the activities of the extinct Fund for the Financing of Payments to Suppliers.

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OFFICIAL STATE GAZETTE No. 171 Tuesday, July 15, 2014 Sec. I. Page 55454

CHAPTER IV Credit operations subscribed from the Fund for the Financing of Payments to Suppliers 2

Article 11. Credit rights. The credit rights of the Fund for the Financing of Payments to Suppliers 2 are rights of the State Public Treasury, and the legal regime applicable to them shall be that established in Law 47/2003, of November 26, General Budgetary Law.

Article 12. Withholding of resources.

1. The resources of the financing system of the Autonomous Communities of Common Regime with borrowing operations assumed, in the creditor position, by the State through the Fund for the Financing of Payments to Suppliers 2 will answer for the obligations derived from them through withholding, in accordance with what is provided in the Eighth Additional Provision of Organic Law 8/1980, of September 22, on Financing of the Autonomous Communities, without the fulfillment of obligations derived from borrowing operations with multilateral financial institutions being affected.
2. The credit rights of the Fund for the Financing of Payments to Suppliers 2 with Local Entities will be guaranteed by the withholdings of their participation in State taxes in accordance with what is provided in the Fourth Additional Provision of the Consolidated Text of the Law Regulating Local Treasuries approved by Royal Legislative Decree 2/2004, of March 5, and with what, if applicable, and in development of that, the General State Budget Laws provide.

Additional Provision. Approval of the budget. The budgets of the Fund for the Financing of Payments to Suppliers 2 for the 2014 fiscal year are approved, which are attached as Annex I.

Repealing Provision. Repeal of regulations. All provisions that oppose what is provided in this Law are repealed, specifically Articles 2 to 6 of Title I of Royal Decree-Law 7/2012, of March 9, creating the Fund for the Financing of Payments to Suppliers, and Article 50 of Law 22/2013, of December 23, on General State Budgets for the year 2014.

First Final Provision. Modification of Royal Legislative Decree 3/2011, of November 14, approving the consolidated text of the Law on Public Sector Contracts. Article 216.4 of the consolidated text of the Law on Public Sector Contracts is drafted as follows:

"The Administration will have the obligation to pay the price within thirty days following the date of approval of the work certifications or the documents that certify compliance with the contract provisions for delivered goods or services provided, without prejudice to what is established in Article 222.4, and if delayed, it must pay the contractor, from the fulfillment of said thirty-day period, interest on delay and compensation for collection costs under the terms provided in Law 3/2004, of December 29, establishing measures to combat delinquency in commercial operations. For the start of the calculation period for the accrual of interest, the contractor must have fulfilled the obligation to present the invoice to the corresponding administrative registry, in time and form, within thirty days from the date of effective delivery of the goods or provision of the service.

Without prejudice to what is established in Articles 222.4 and 235.1, the Administration must approve the work certifications or the documents that certify compliance with the contract provisions for delivered goods or services provided within thirty days following the effective delivery of the goods or provision of the service, unless an express contrary agreement is established in the contract and in one of the documents governing the tender, provided it is not manifestly abusive for the creditor within the meaning of Article 9 of Law 3/2004, of December 29, establishing measures to combat delinquency in commercial operations.

In any case, if the contractor fails to meet the thirty-day deadline to present the invoice to the administrative registry, the accrual of interest will not begin until thirty days have passed from the date of presentation of the invoice in the corresponding registry, without the Administration having approved the compliance, if applicable, and made the corresponding payment."

Second Final Provision. Modification of

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