Published: 2014-07-01
Key Benefits:
Passed 19.02.2014
| 19.06.2014 | RT I, 29.06.2014, 109 | 01.07.2014 |
(1) This Act provides the conditions and procedure for the drafting and passage of the state budget and the use of the funds in the state budget. In addition, the bases for drafting the state budget are provided, pursuant to which the fiscal policy opportunities arising from the state financial forecasts and strategic development documents are followed when drafting the state budget.
(2) To meet the requirements established for drafting the state budget, this Act provides the conditions for the assumption of obligations and the planning of financial resources by the central government sub-sector entities of the general government sector.
(1) The general government sector shall include the entities specified in paragraph 2.112 of Annex A to Regulation (EU) No 549/2013 of the European Parliament and of the Council on the European system of national and regional accounts in the European Union (OJ L 174, 26.06.2013, p. 1–727).
(2) The general government sector is divided into the central government, local government and social security funds sub-sector. The entities belonging to the central government sub-sector (hereinafter central government) include:
1) governmental authority, state authority agency administered by governmental authority, county court, administrative court and circuit court (hereinafter state authorities);
2) the Chancellery of the Riigikogu, the Office of the President of the Republic, the National Audit Office, the Office of the Chancellor of Justice and the Supreme Court (hereinafter constitutional institutions) and the authorities in their area of administration;
3) legal person in public law, foundation established by the state and company with state participation defined as central government entity pursuant to Regulation (EU) No 549/2013 of the European Parliament and of the Council (hereinafter central government legal persons).
(3) Statistics Estonia shall publish the list of the general government sector entities on its website and inform of the belonging of an entity to the general government sector.
(1) For the purposes of this Act, the area of government of the ministry means the ministry together with the state authorities in its area of government.
(2) The provisions of this Act concerning the ministry, the area of government of the ministry and the state authorities shall apply to the constitutional institutions and the authorities in their area of administration, unless otherwise provided by this Act.
(3) The provisions of this Act concerning the ministry and the area of government of the ministry shall apply to the Government Office and the area of administration of the Government Office.
(1) The Fiscal Council is the advisory board formed pursuant to § 42 of the Eesti Pank Act, which assesses the state macroeconomic forecasts and the state financial forecasts and monitors the compliance with the budgetary rules specified in Chapter 2 of this Act pursuant to the requirements established in this Act and the European Union law.
(2) If an opinion of the Fiscal Council is disregarded, the Government of the Republic shall justify it publicly.
(3) The Ministry of Finance shall justify disregarding an assessment provided in respect to the state macroeconomic forecast (hereinafter macroeconomic forecast) and the state financial forecast (hereinafter financial forecast).
(1) The budget position of the general government sector is the difference between the total revenue and total expenditure of the general government sector.
(2) The structural budget position of the general government sector is the cyclically adjusted budget position of the general government sector, which does not take into account one-off or temporary transactions.
(3) The medium-term budgetary objective is established in the structural budget position objective of the general government sector established in the stability programme for the Member State of the European Union pursuant to Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budget positions and the surveillance and coordination of economic policies (OJ L 209, 02.08.1997, p. 1–5).
(1) The state budget shall be drafted in such way that the structural budget position of the general government sector is in balance or in surplus taking into account the state financial forecast specified in § 15 of this Act.
(2) It shall be ensured by law or on the basis of law that the budget of a central government legal person is drafted and approved in such way that the difference between the operating revenue and expenses during the budgetary year (hereinafter operating result) is in balance or in surplus.
(3) It shall be ensured by law or on the basis of law that the planned operating result of a central government legal person may be in deficit up to 30 per cent of the operating revenue during the budgetary year if the deficit of the operating result is covered from the liquid assets previously accumulated as surplus of the operating result.
(4) The requirement provided for in subsection (2) of this section shall not apply to a central government legal person if the deficit of its planned operating result is related to the foundation, reorganisation or dissolution of the central government legal person envisaged in the scheme of operations or business plan.
(5) The accounting methodology of the operating revenue and the operating expenses of a central government legal person shall be established by a regulation of the Minister of Finance, taking into account the principles established by Regulation (EU) No 549/2013 of the European Parliament and of the Council.
(1) If pursuant to the state financial forecast specified in § 15 of this Act the structural budget position of the general government sector is in deficit, the Minister of Finance shall submit, within one month following the publication of the forecast, to the Government of the Republic for informational purposes the analysis of the situation and, if necessary, the proposals for the improvement of the structural budget position of the general government sector.
(2) If pursuant to the state financial forecast the structural budgetary deficit of the general government sector is greater than 0.5 per cent of the gross domestic product (hereinafter GDP) or if in the European Union fiscal policy coordination process pursuant to Council Regulation (EC) No 1466/97 the European Commission and the Council of the European Union find that the structural budget position of the Estonian general government sector differs to a significant extent from the medium-term budgetary objective specified in subsection 5 (3) of this Act or from the adjustment path for the achievement thereof, the Government of the Republic shall implement measures improving the budget position, following the requirements of the Stability and Growth Pact.
(3) For the purposes of this Act, the Stability and Growth Pact shall have the same meaning as provided for in Council Regulation (EC) No 1466/97 and Council Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (OJ L 209, 02.08.1997, p. 6–11).
(4) The measures specified in subsection (2) of this section shall be implemented in such way that the structural budget position of the general government sector would be improved by at least 0.5 per cent of the GDP per year until the structural budget balance is achieved.
If in the year preceding the drafting of the state budget the structural budgetary deficit of the general government sector based on the financial forecast estimate exceeded 0.5 per cent of the GDP, after the achievement of the structural budget balance the structural surplus of the general government sector of at least 0.5 per cent of the GDP per year shall be planned in the following years until the surplus equivalent to the budgetary deficit is achieved in euros.
The implementation of the measures specified in subsection 7 (2) of this Act and the planning of the surplus specified in § 8 may be postponed in case of extraordinary circumstances pursuant to the Stability and Growth Pact.
(1) It shall be ensured by law or on the basis of law that the difference between the debt obligations and the total amount of the liquid assets of a central government legal person planned as at the end of a budgetary year (hereinafter net debt) may form up to 40 per cent of the operating revenue planned for the same budgetary year throughout the period included in the financial plan submitted on the basis of § 12 of this Act. The Government of the Republic shall decide on the permission to increase the net debt in excess of 40 per cent, taking into account the requirements provided for in this Chapter.
(2) The calculation methodology of the debt obligations and liquid assets of a central government legal person shall be established by a regulation of the Minister of Finance.
(1) The state budget may, in justified cases, impose additional restrictions on the operating result or net debt of a central government legal person specified in §§ 6 and 10 of this Act. The obligation of a central government legal person to adhere to such restrictions shall be ensured by law or on the basis of law.
(2) The imposition of the additional restrictions specified in subsection (1) of this section shall be permitted if at least one of the following circumstances occurs:
1) the state financial forecast indicates the increase of the budget position deficit of the general government sector during a budgetary year in excess of two per cent of the GDP;
2) the state financial forecast indicates the growth of the debt of the general government sector during a budgetary year in excess of 50 per cent of the GDP;
3) the Government of the Republic is required to implement the measures improving the budget position and specified in subsection 7 (2) of this Act.
(1) It shall be ensured by law or on the basis of law that a central government legal person shall submit each year a financial plan concerning its current budgetary year, the preceding budgetary year and the next four budgetary years. The information shall be submitted with the intermediation of the ministry exercising the rights of a founder or the ministry in the corresponding field to the Ministry of Finance by 1 March.
(2) The requirements towards the content of the financial plan and the financial plan submission procedure shall be established by a regulation of the Minister of Finance.
(1) The Minister of Finance and the minister exercising the rights of a founder or the minister in the corresponding field shall be entitled, for the assessment of the compliance with the budgetary rules provided for in this Chapter, to receive from a central government legal person the relevant information.
(2) The minister exercising the rights of a founder or the minister in the corresponding field shall be entitled, for the assessment of an application for the receipt of support from the state budget and the inspection of the use of the support, to receive from a central government legal person the relevant information.
(3) The Minister of Finance shall receive the information with the intermediation of the minister exercising the rights of a founder or the minister in the corresponding field.
The Fiscal Council shall present an opinion regarding the objectives of the structural budget position of the general government sector recorded in the budget strategy and the stability programme prior to the approval of the budget strategy and the stability programme, following the budget position rules and the necessity to adjust the structural budget position.
(1) The objective of the macroeconomic forecast is to describe the state economic environment together with the likely developments and to inform the public thereof.
(2) The macroeconomic forecast provides the basis for the financial forecast, which describes the revenue, expenditure and investments of the general government sector together with the likely changes. The financial forecast provides the basis for the state budget strategy (hereinafter budget strategy) and the draft state budget.
(1) The macroeconomic forecast and the financial forecast shall be prepared annually with regard to the current budgetary year and the following four years, relying on the latest known data series. The data used as the external environment prerequisites for the macroeconomic forecast and the financial forecast shall not be older than two months by the intended publication date of the forecast.
(2) The alternative assumptions used in the preparation of the macroeconomic forecast and the financial forecast shall be based on how exact the previous forecasts have been, and the relevant risk scenarios shall be taken into account. The macroeconomic forecast shall present in addition to the baseline scenario at least one risk scenario, and its potential impact on the accrued revenue and balance of the state budget shall be assessed. The financial forecast shall be prepared on the basis of the most likely or a more conservative scenario of the macroeconomic forecast.
(3) The macroeconomic forecast and the financial forecast shall contain a sensitivity analysis, which explores how the main fiscal variables are formed on the basis of various economic growth and interest rate forecasts.
(4) The macroeconomic forecast and the financial forecast shall be compared to the most up-to-date forecasts of the European Commission and other independent institutions, and the explanatory memorandum of the macroeconomic forecast and the financial forecast shall provide an overview of the differences.
(1) The Ministry of Finance shall prepare the macroeconomic forecast and the financial forecast pursuant to the requirements provided for in this Act and the European Union law.
(2) The officials or employees preparing the macroeconomic forecast and the financial forecast shall be independent in the preparation of the forecast and choosing the methods of preparation.
(1) The Fiscal Council shall provide an opinion regarding the macroeconomic forecast and the financial forecast within two weeks as of their publication. The Ministry of Finance shall justify disregarding the opinion of the Fiscal Council publicly within two weeks as of the publication of the opinion of the Fiscal Council.
(2) The Ministry of Finance shall publish the macroeconomic forecast and the financial forecast on its website immediately after the preparation of the forecast.
(1) The strategic development documents include the general principles of policy, sectoral development plan, development plan of the area of government and programme.
(2) The general principles of policy is a development document which determines the vision, national objective and priorities for one or several interrelated policy areas.
(3) The sectoral development plan is a development document which comprehensively determines the general objective and sub-objectives for one or several policy areas and the indicators providing an opportunity to measure these, and the policy instruments through which it is planned to achieve the established objectives.
(4) The development plan of the area of government is a development document which records the contributions by a ministry and the authorities in its area of government to the achievement of the general objectives of the performance areas.
(5) The programme is a development document which determines the measures, indicators, activities and financing scheme targeted at the achievement of a sub-objective of a policy area.
(6) The strategic development documents shall be mutually consistent.
(7) The constitutional institutions are not required to prepare the strategic development documents.
(1) The general principles of policy-making shall be approved by the Riigikogu either on its initiative or on the proposal of the Government of the Republic.
(2) The sectoral development plan shall be prepared at least for the budget strategy period. The sectoral development plan shall be approved by the Government of the Republic unless otherwise provided by law. The sectoral development plan shall be submitted, prior to approval, to the Riigikogu for deliberation.
(3) The development plan of the area of government shall be prepared at least for the budget strategy period. The development plan of the area of government shall be approved by the minister.
(4) The programme shall be prepared in compliance with the budget strategy period. The programme shall be approved by the minister. If several ministries contribute to the achievement of the programme objective, the programme shall be divided into sub-programmes and the ministers shall approve the sub-programmes and, if necessary, the whole programme.
(5) The procedure for the preparation, implementation, reporting and evaluation of the sectoral development plan, development plan of the area of government and the programme and the amendments thereto shall be established by a regulation of the Government of the Republic.
(1) The budget strategy determines the main directions of the state fiscal policy and records the general objectives of the Government of the Republic, which are intended to be implemented during the budget strategy period, and the funds planned for the implementation (hereinafter financing scheme). The budget strategy is prepared each year with regard to at least the next year and the following three years (hereinafter budget strategy period).
(2) The basis for the financing scheme is the financial forecast.
(3) The budget strategy shall include on a yearly basis:
1) the state fiscal policy objectives, including the with regard to the budget position of the general government sector and the amount of debt;
2) the provisional budget position of the sub-sector of the general government sector or its entities and other financial information together with significant changes in the financing and financial management principles;
3) the state economic situation analysis based on the macroeconomic forecast and the financial forecast;
4) the maximum volumes of funding permitted to the area of government of a ministry for the budget strategy period (hereinafter cost ceilings).
(1) The budget strategy shall be prepared by the Ministry of Finance.
(2) The information concerning the coming years provided in the budget strategy for the previous period shall be amended upon the approval of the new budget strategy only in case the general objective of a performance area, the action programme of the Government of the Republic, the main directions of the state fiscal policy, the macroeconomic forecast, financial forecast or legislation have materially changed.
(3) The Ministry of Finance shall have the right to receive the necessary information from the ministries and the persons belonging to the general government sector for the preparation of the budget strategy.
(4) The procedure for the preparation of the budget strategy shall be established by a regulation of the Minister of Finance.
(1) Together with the budget strategy, the Ministry of Finance shall prepare the stability programme, which complies with Council Regulation (EC) No 1466/97.
(2) The stability programme shall be prepared in compliance with the fiscal policy objectives provided in the budget strategy, the general objectives of the Government of the Republic and their financing scheme.
(1) The budget strategy shall be approved by the Government of the Republic no later than eight months before the beginning of the next budgetary year.
(2) In the year of the regular elections to the Riigikogu, the Government of the Republic shall approve the budget strategy no later than seven months before the beginning of the next budgetary year.
(1) The Ministry of Finance shall publish the approved budget strategy and stability programme on its website promptly following the approval.
(2) The Government of the Republic shall submit the budget strategy to the Riigikogu promptly following the approval.
(1) The state budget is the state financial plan which records the funds (hereinafter funds), which the state plans to accumulate, receive as support, intermediate and use during the budgetary year.
(2) In the state budget, the funds shall be classified on the basis of the budget classification administratively. The administratively classified funds are classified according to economic content.
(3) The administrative classification shows which areas of government of the ministries accumulate, receive as support, intermediate or use the state budget funds. In the administrative classification, the Government of the Republic may also be mentioned with regard to the funds to be used by the Government of the Republic.
(4) According to economic content, the state budget funds shall be divided into revenue, expenditure, investments and financing transactions based on the following:
1) revenue means all the funds, which the state accumulates or receives as support in the performance of its functions;
2) expenditure means the funds used by the state, which are neither investments nor financing transactions;
3) investments mean the funds planned for the acquisition and renovation of tangible and intangible assets;
4) financing transactions mean the transactions with financial assets or liabilities where, on a double-entry basis, both entries are made in the financial assets or liabilities and as a result of which the budget position does not change.
(1) The state budget shall be drafted with regard to one budgetary year.
(2) The budgetary year shall begin on 1 January and end on 31 December.
(1) The following shall be presented in the state budget:
1) the consolidated budget of the state budget funds;
2) the amount of the state budget surplus or deficit;
3) the classification of the state budget funds.
(2) The State Budget Act shall stipulate the provisions which are to be submitted pursuant to an obligation arising from the legislation or which are related to the regulation or conditions of the accumulation, receipt as support, intermediation or use of the state budget funds during the budgetary year.
(3) The State Budget Act shall not stipulate the provisions for the amendment or repeal of another Act.
(1) The budget classification provides the detailed breakdown of the funds and the accounting policies used in budgeting and financial management.
(2) In case of activity based budget, the budget classification provides the detailed activity based breakdown of the funds by areas of government of the ministries and programmes.
(3) The Government of the Republic shall decide on the use of the activity based breakdown in the draft state budget. The Government of the Republic shall decide on the activity based breakdown of the budget of a constitutional institution on the initiative of the constitutional institution.
(4) The budget classification shall be established by a regulation of the Minister of Finance.
(1) The state budget shall break down the revenue, expenditure, investments and financing transactions according to economic content.
(2) The revenue shall be broken down into operating revenue, financial income and transfers received from the state authorities.
(3) The operating revenue shall be broken down as follows:
1) taxes and social security contributions;
2) sale of goods and services;
3) received support;
4) other revenue.
(4) The expenditure shall be broken down into operating expenses, financial expenses and transfers granted to the state authorities.
(5) The operating expenses shall be broken down as follows:
1) granted support and other transfers;
2) labour and management costs;
3) other operating expenses.
(6) Investments need not be broken down in the state budget.
(7) The financing transactions shall be broken down as follows:
1) increase in financial assets;
2) decrease in financial assets;
3) increase in liabilities;
4) decrease in liabilities;
(8) In case of activity based budget, subsections (1)–(7) of this section shall not apply, and the funds shall be broken down in the state budget based on administrative and activity based content as follows:
1) performance areas;
2) programmes;
3) sub-programmes if several ministries contribute to one programme.
(9) The funds broken down according to subsection (8) of this section shall be broken down in the state budget based on economic content as follows:
1) revenue;
2) operating expenses;
3) investments;
4) financing transactions.
(1) The Government of the Republic shall break down the investments in immovables of the area of government of the ministry specified in the state budget by properties. The Government of the Republic may break down other investments, expenditure and financing transactions of the area of government of the ministry specified in the state budget in compliance with the budget classification.
(2) The minister shall break down the expenditure, investments and financing transactions of the area of government of the ministry specified in the state budget administratively and according to economic content in the budget of the area of government in compliance with the budget classification and following the breakdown of the Government of the Republic established on the basis of subsection (1) of this section.
[RT I, 29.06.2014, 109 - entry into force 01.07.2014]
(3) The constitutional institutions and the authorities in their area of administration shall break down the expenditure, investments and financing transactions specified in the state budget according to economic content or based on activity in their budget in compliance with the budget classification.
(1) The state budget funds are divided into the funds with and without limits. No restrictions shall be imposed by the state budget on the amount of payments made on account of the funds without limits.
(2) The funds without limits include:
1) the expenditure, investment and financing transaction, the possibility of making which depends on the receipt of specific revenue (hereinafter funds depending on revenue);
2) the expenditure, investment and financing transaction, the amount of which arises from law (hereinafter estimated funds);
3) revenue.
(3) The taxes, fees or other charges planned in the state budget both as revenue and expenditure, which the state collects and transfers to a person designated by legislation (hereinafter transferable tax), shall be transferred to the beneficiary according to actual revenue.
(1) The transfer of the state budget funds is the extension of the term of using the state budget funds by one budgetary year (hereinafter transfer).
(2) The estimated funds shall not be transferred, unless otherwise provided by this Act or the state budget.
(3) The funds depending on revenue, excluding the transfers from the state authorities received on account of the state budget funds with limit, shall be transferable to the next budgetary year in the amounts of the corresponding revenue actually received and unused by the end of a budgetary year. The transfers from the state authorities received on account of the state budget funds with limit may be transferred to the extent of up to three per cent of the amount of the received transfer, unless established otherwise in the state budget.
(4) The funds of the transferable tax shall be transferred to the next budgetary year in the amounts actually received, but not transferred to the beneficiary by the end of a budgetary year.
(5) Unless otherwise provided by the state budget, the funds with limits shall be transferred, taking into account the following:
1) the expenditure shall be transferred to the extent of up to three per cent of the amount of the expenditure broken down in the state budget;
2) the total amount of the investments shall be transferred;
3) the financing transactions shall not be transferred;
4) the total amount of the state co-financing of such targeted or non-targeted financial support received from the European Union, an international organisation, foreign state and non-governmental organisation of a foreign state, for which no goods or services are directly given in exchange to the provider of foreign support (hereinafter foreign support), shall be transferred.
(6) The procedure for the transfer of the state budget funds shall be established by a regulation of the Minister of Finance.
The draft state budget shall be compiled on the basis of the budget strategy and financial forecast.
(1) For the compilation of the draft state budget, a ministry shall submit to the Ministry of Finance the budget project of its area of government, which shall follow, inter alia, the budget strategy, the cost ceilings approved in the budget strategy and the sectoral development plan objectives.
(2) An application for the allocation of the funds from the state budget to a legal person in public law shall be submitted in the budget project of the area of government of the ministry with whose area of competence the activities of the corresponding legal person in public law are mainly connected.
(3) The opinion of the Council for Administration of Courts regarding the conformity of the funds planned for the county courts, administrative courts and circuit courts to the principles of the formation of annual budgets of courts shall be enclosed to the budget project of the Ministry of Justice.
(4) The procedure for the compilation of a budget draft for the area of government of a ministry shall be established by a regulation of the Minister of Finance.
(1) The Ministry of Finance and a ministry shall conduct negotiations regarding a draft budget for the area of government of the ministry. If the parties do not consider conducting the negotiations necessary, this agreement shall be documented in writing.
(2) The Ministry of Finance shall submit the minutes specifying the agreements between the parties and any potential dissenting opinions, together with proposals, to the Government of the Republic.
(1) The Ministry of Finance shall submit the draft state budget together with explanatory memorandum to the Government of the Republic not later than four months before the beginning of the budgetary year.
(2) In case of any changes in the amount of the funds prescribed in the draft state budget for the constitutional institutions and the authorities in their area of administration or the omission of the funds, the Government of the Republic shall submit the made changes and disagreements together with justification in the explanatory memorandum to the draft state budget.
(3) In case of any changes in the amount of the funds prescribed in the draft state budget for the county courts, administrative courts or circuit courts, the Government of the Republic shall submit the made changes together with the opinion of the Council for Administration of Courts in the explanatory memorandum to the draft state budget.
(1) The Government of the Republic shall submit the draft state budget together with the explanatory memorandum to the Riigikogu not later than three months before the beginning of the budgetary year.
(2) The draft state budget submitted to the Riigikogu shall conform to the published legislation and the draft legislation initiated by the Government of the Republic in the Riigikogu prior to the submission of the draft state budget. The submitted draft state budget may take into account the amendments made during the legislative proceeding in the Riigikogu in the draft legislation initiated by the Government of the Republic in the Riigikogu.
(3) The explanatory memorandum to the draft state budget shall provide an overview of the state budget and justify, according to economic content and activity based information, the amount of the funds planned in the draft state budget in detail, and also provide the overview by the Government of the Republic of the anticipated economic situation within the next four years and the proposed activities of the state.
The Riigikogu shall conduct the legislative proceeding of the draft state budget on the basis of the Riigikogu Internal Rules and Rules of Procedure Act with the specifications arising from this Act.
(1) The initiator of a motion for amending the draft state budget, which would have the effect of decreasing estimated revenue or increasing or reallocating expenditure, investment or financing transaction, shall append financial calculations specifying the necessary sources for covering expenditure.
(2) A motion to amend the draft state budget shall not cause a structural state budget deficit, an increase in the state budget deficit or a decrease in the structural state budget surplus.
The Riigikogu shall pass a state budget as an Act.
(1) If the Riigikogu has failed to pass the state budget by the beginning of the budgetary year, the area of government of a ministry, prior to the passage of the state budget, can make expenditure, investments and financing transactions each month of the new year within up to one-twelfth of the corresponding expenditure, investment or financing transaction in the state budget for the previous year on the condition that the expenditure, investment or financing transaction:
1) is also prescribed in the draft state budget for the new year and
2) does not exceed one-twelfth of the amount of the corresponding expenditure, investment or financing transaction prescribed in the draft budget for the new year.
(2) If the Riigikogu has failed to pass the state budget by the beginning of the budgetary year, the rates and limits established for the previous year based on the State Budget Act shall apply until the passage of the state budget.
(3) If, during a state of war, the Riigikogu has failed to pass the state budget by the beginning of the budgetary year, the Government of the Republic shall decide on the implementation of the draft state budget submitted to the Riigikogu until the passage of the state budget by the Riigikogu. In such case, prior to the passage of the state budget by the Riigikogu, the expenditure, investments and financing transactions made on a monthly basis shall not exceed in total one-twelfth of the expenditure, investments and financing transactions in the state budget for the previous year.
(1) In order to amend the state budget without amending the total amount of funds, the Government of the Republic may initiate a draft State Budget Amendment Act not later than two months before the end of the budgetary year.
(2) The Ministry of Finance shall compile a draft State Budget Amendment Act together with the explanatory memorandum.
(3) The submission, deliberation and passage of a draft State Budget Amendment Act shall be conducted pursuant to the procedure provided for in §§ 39 and 40 of this Act.
(1) In order to amend the state budget amending the total amount of funds, the Government of the Republic may initiate a draft supplementary budget not later than three months before the end of the budgetary year.
(2) The Ministry of Finance shall compile a draft supplementary budget together with the explanatory memorandum.
(3) The submission, deliberation and passage of a draft supplementary budget shall be conducted pursuant to the procedure provided for in §§ 39 and 40 of this Act.
(1) During a state of war, to perform the obligations provided for in a collective self-defence agreement and after increasing of military readiness approved by the Riigikogu, the Government of the Republic may submit to the Riigikogu a draft State Budget Amendment Act or a draft supplementary budget and decide, if necessary, on the implementation thereof until such time as the Riigikogu adopts a resolution on the matter, whereas the total amount of expenditure to be incurred before the Riigikogu adopts a resolution on the matter shall not exceed ten per cent of the amount of expenditure in the state budget for the current year.
(2) The time limits specified in subsection 43 (1) and subsection 44 (1) of this Act shall not apply if the reason for the initiation of the amendment of the state budget or supplementary budget is the following:
1) resolution and prevention of a financial crisis that may cause difficulties related to liquidity or solvency for the credit institutions, insurance undertakings or financial institutions (hereinafter financial institutions) or significant disruptions in the payment and settlement systems;
2) ensuring of financial stability of a foreign state, eurozone or a Member State thereof;
3) increasing of military readiness, performance of the obligations provided for in a collective self-defence agreement, declaration of an emergency situation, a state of emergency, a state of war, or mobilisation;
4) resolution of the Riigikogu specified in subsection 73 (1) of this Act;
(3) In order to increase military readiness, carry out mobilisation or perform the obligations provided for in a collective self-defence agreement, the Government of the Republic may, on the proposal of the Minister of Defence, submit a draft State Budget Amendment Act to the Riigikogu providing for a change in the purpose of state budget expenditure in the area of government of the Ministry of Defence, and, if necessary, decide on the implementation of the draft budget submitted to the Riigikogu until such time as the Riigikogu adopts a resolution on the matter.
(1) The state budget grants support to local governments:
1) from the equalisation fund;
2) from the support fund;
3) for supporting specific activities or investment case-by-case.
(2) The representatives of the local governments and national associations of local governments and the representatives of the Government of the Republic shall conduct negotiations with the objective to agree on the following issues:
1) the amount and principles of receipt of transferable taxes;
2) the principles of distribution, conditions of use, principles of formation of amount, and the amounts of support specified in subsection (1) of this section for the budget strategy period and budgetary year;
3) the principles of covering the expenses of the state functions imposed on a local government by law;
4) the methodology of recording the information specified in clauses 1) and 2) of this subsection in the budget strategy and the draft state budget;
5) the measures for ensuring financial discipline and amount of surplus or deficit of the consolidated budget of a local government for the budget strategy period;
6) if the situation specified in subsection 7 (2) of this Act arises, the measures for the local governments which improve the structural budget position of the general government sector.
(3) The agreements achieved on the issues specified in subsection (2) of this section shall be recorded in the budget strategy, draft state budget, draft Act or other legislation. The Government of the Republic shall decide on the issues where no agreement is reached upon the preparation of the budget strategy and the draft state budget.
(4) The minutes concerning the agreements entered into during the negotiations and the parties' disagreements shall be enclosed to the budget strategy or the explanatory memorandum to the draft state budget.
(5) The budget strategy shall provide the information concerning the provisional amounts of the taxes transferable to the local governments and the support granted from the equalisation fund and the support fund.
(1) The size and the principles of distribution of the equalisation fund shall be determined in the state budget.
(2) The objective of the equalisation fund is, without determining the conditions of using the funds, to harmonise the opportunities for performance of the functions of the local governments. The distribution of the equalisation fund shall use as the basis the income tax and land tax received by a local government, the number of residents of a local government and other specifications of a local government.
(3) The distribution of the equalisation fund between the local governments shall be established by an order of the Government of the Republic.
(1) The size of the support fund and the types of support included therein shall be determined in the state budget.
(2) The support fund means the support granted to the local governments for the use pursuant to the purposes and conditions provided by law or the support granted for the purposes determined in the state budget, which shall be distributed only based on the figures.
(3) The figures providing the basis for the distribution of the support fund and the bases for the calculation thereof shall be established by law. The values of the figures shall be determined in the state budget.
(4) The conditions and procedure for the distribution and use of the support fund shall be established by a regulation of the Government of the Republic.
(5) The Government of the Republic shall establish, by a regulation specified in subsection (4) of this section, also the figures providing the basis for the distribution of the support fund if the support fund includes support with the duration of one year determined in the state budget, and the figures providing the basis for the distribution thereof are not provided by law.
(6) The distribution of the support fund between the local governments shall be established by an order of the Government of the Republic.
(1) The rules for the execution of payments established on the basis of subsection 64 (4) of this Act shall provide the conditions and procedure for the payment of support and making the advance payments of support assigned to a local government on the basis of subsection 47 (3) and subsection 48 (6) of this Act.
(2) Unless the Government of the Republic has established the distribution specified in subsection 47 (3) and subsection 48 (6) of this Act by the beginning of a budgetary year, the payments shall be made to the local governments until the establishment of the distribution to ensure sufficient funds. A local government shall be paid each month up to one-twelfth of the amount allocated for the same purpose in the previous budgetary year on the basis of the distribution approved by the Government of the Republic, taking into account the amount planned in the state budget for the current budgetary year or the amount planned in the draft state budget, unless the state budget for the current year has been passed.
(1) A ministry shall grant targeted support to a local government for investments or operating expenses from the funds prescribed for the area of government of the ministry by the state budget on a case-by-case basis.
(2) When supporting the investment of a local government and an entity under the dominant influence thereof on a case-by-case basis, excluding the case specified in subsection 53 (7) of this Act, the legislation shall prescribe at least:
1) the objective of granting support;
2) the activities supported;
3) if applicable, the rate of self-financing;
4) the principles for assessment of application;
5) the procedure for the making of payments of support;
6) the bases and procedure for the reclamation of support.
(3) The Minister may establish a regulation conforming to the conditions specified in subsection (2) of this section for granting the investment support to a local government and an entity under the dominant influence thereof on a case-by-case basis from the funds prescribed in the budget of the area of government of a ministry.
(4) The case-by-case investment support shall be granted from the state budget to a local government on the following conditions:
1) the supported investment shall arise from the development plan of a local government;
2) the development plan and the budget strategy of a local government shall comprise at least the period specified by law;
3) when contributing to the self-financing, a local government shall be able to ensure the self-financing on the conditions prescribed by law.
(5) If a local government or a dependent entity under the dominant influence thereof is required to cover the self-financing of an investment, the prerequisite for granting the investment support shall be the implementation of the financial discipline measures established by law.
(1) The basis for covering the expenses of a state function imposed on a local government by law (hereinafter state function) shall be the average calculated expenditure or actual expenditure.
(2) If the expenses of a state function are covered on the basis of the figures provided by law, the principles of calculation of average expenditure or compensation for actual expenditure shall be determined by a regulation specified in subsection 48 (4) of this Act.
(3) If the expenses of a state function are covered are covered from a ministry budget on a case-by-case basis, the minister shall establish by a regulation:
1) the principles of calculation of average expenditure or compensation for actual expenditure in covering the expenses of a state function;
2) the procedure for submission and processing of applications for covering the expenses.
(4) The extent of covering the expenses of a state function for each year shall be determined by the state budget.
(5) The funds granted for covering the expenses of a state function shall be planned in the state budget.
(6) The explanatory memorandum to the draft state budget shall provide the information regarding the amount of funds granted for covering the expenses of each state function and the provider thereof.
Unless the provider of support has envisaged refunding of the unused funds of the support fund or case-by-case support to the state budget, a local government may use these in the next budgetary year for the same purpose.
(1) The area of government of a ministry shall have the right to use the state budget funds for the intended purpose and only in case the corresponding funds are prescribed in the budget and unless otherwise provided by this Act.
(2) The area of government of a ministry shall have the right to use the state budget funds only within the same budgetary year, unless otherwise provided by this Act or the state budget. The obligations not performed by the end of a budgetary year shall be performed on account of the transferred funds of the state budget or the funds of the next budgetary year.
(3) The transferred funds of the state budget may be used for the purpose determined in the state budget. The economic content of the funds may be amended upon the transfer only in case the purpose of the expenditure does not change. The administrative breakdown and economic content of the state budget funds to be transferred may be amended upon the transfer if this is related to the reorganisation or dissolution of a state authority in the area of government of a ministry.
(4) The purpose, for the purposes of this section, is specific activities for which the state budget funds are planned.
(5) The funds depending on revenue may be used after the actual receipt of the revenue, excluding the case provided for in subsection 54 (1) of this Act.
(6) A state authority may use the foreign support funds received for the compensation for the made expenses and the foreign support co-financing funds for the purpose of the funds, which were used for making the compensated expenses.
(7) To use the funds provided for in the state budget as an additional allocation to the area of government of a ministry, the contract for the use of the allocation from the state budget shall be entered into between the state authority and a legal person receiving the allocation, unless otherwise provided by law or on the basis thereof.
(1) A state authority may use the foreign support and the foreign support co-financing funds, upon the consent of the Ministry of Finance, prior to the receipt thereof.
(2) If a state authority has made payments on account of the funds specified in subsection (1) of this section in a larger amount than the foreign support or the foreign support co-financing funds will be received, the state authorities or its superior ministry, and in case of payments made by the intermediary of the foreign support a ministry whose area of responsibility includes the performance of the function of the payment of the corresponding foreign support, shall cover the remaining amount from the budget funds of the state authorities or the area of government of the ministry or apply for the covering of the deficit from the reserve fund of the Government of the Republic.
(3) The procedure and conditions for the use of the funds specified in subsection (1) of this section shall be established by the Minister of Finance in the rules for the execution of payments established on the basis of subsection 64 (4) of this Act.
The provider of the state co-financing funds provided in the state budget for support or foreign support shall ensure that the recipient of the funds undertakes to use the received funds only for the purpose determined by the provider of the funds.
(1) The administrative breakdown and the breakdown according to economic content of using the funds determined by the state budget may be amended exclusively by the amendment of the state budget or a supplementary budget, unless otherwise provided by this Act or the state budget.
(2) The Government of the Republic shall have the right to amend the administrative breakdown and the breakdown according to economic content of the following funds determined in the state budget:
1) the funds related to foreign support and state co-financing;
2) the funds of the area of government of the Ministry of Defence for financing participation in an international military operation;
3) the funds of the area of government of a ministry related to the reorganisation or dissolution of a state authority in the area of government of a ministry.
(3) The Government of the Republic shall have the right to amend the breakdown of the expenditure and investment determined in the state budget according to economic content if the amendment is caused by the fact that, due to the conditions specified in the course of conclusion of a specific transaction, the transaction is classified pursuant to the according to the rules for recognising fixed assets differently than planned in the drafting of the state budget.
(4) The Government of the Republic shall have the right, upon the reorganisation or dissolution of a state authority, to reduce the funds allocated for the authority in the state budget and to assign the amounts, which become available, to the reserve fund of the Government of the Republic. The subsidies, revenue received from the economic activities of the authority and revenue received from the sale of inventories and fixed assets shall not be assigned to the reserve fund of the Government of the Republic.
(5) If upon the reorganisation or dissolution of a state authority the functions of the authority are not assigned to another state authority, the unused subsidies, revenue received from the economic activities and revenue received from the sale of inventories and fixed assets of the reorganised or dissolved state authority shall be assigned to the state revenues.
(1) A ministry shall have the right to make amendments during a budgetary year in the administrative division or division according to economic content of the expenditure prescribed by the state budget to the area of government of a ministry for the write-off of principal amount of study loans and taxes on fringe benefits.
(2) If the funds allocated by the state budget to the area of government of the ministry are insufficient for the write-off of principal amount of study loans and taxes on fringe benefits, the ministry may submit a reasoned application to the Ministry of Finance for the allocation of additional funds by the authorities within the area of government of the ministry.
(1) The funds in the reserve fund of the Government of the Republic may be used for unforeseeable expenditure, investments and financing transactions, which cannot be planned in the legislative proceeding of the draft state budget.
(2) The Government of the Republic shall decide on the allocation of the funds from the reserve fund of the Government of the Republic.
(3) The procedure for the allocation of the funds from the reserve fund of the Government of the Republic and the use of the allocated funds shall be established by a regulation of the Government of the Republic.
The revenue shall be received in the liquid financial assets of the state, unless otherwise provided by law.
(1) A state authority shall have the right to assume obligations only in case if the funds have been designated thereto for the performance of the obligation in the state budget or in a budget approved on the basis thereof.
(2) Unless otherwise provided by this Act, a state authority shall be prohibited to:
1) assume debt obligations for the state;
2) grant state guarantee or other collateral;
3) grant a loan;
4) make donations;
5) acquire financial assets, excluding participation in legal persons in private law by the state on the basis of the State Assets Act;
6) conclude transactions under finance lease, make concessions and conclude other such transactions, unless the state budget has granted an authorisation therefor.
(3) When granting the authorisation specified in clause (2) 6) of this section, the state budget shall determine:
1) the objective of the transaction;
2) the amount of the obligation assumed for the state, the amount of payments due in one budgetary year and the conditions for changing the amount of payments;
3) the term of obligation assumed for the state;
4) other essential conditions of the transaction.
(4) A minister may permit the state authorities in the area of government of a ministry to assume financial obligations for the upcoming budgetary year provided that in no upcoming budgetary year the amount of the financial obligations performed by the area of government of the ministry shall exceed 50 per cent of the funds with limit of the cost ceiling for the corresponding upcoming budgetary year of the area of government of the ministry.
(5) On the proposal of the Minister of Finance, the Government of the Republic may increase the maximum rate of the assumption of financial obligations of the area of government of a ministry for the upcoming budgetary year, which is provided for in subsection (4) of this section, but not more than to 80 per cent of the funds with limit of the cost ceiling for the corresponding upcoming budgetary year of the area of government of the ministry. The state budget may provide the Government of the Republic with the right to permit the assumption of financial obligations by the area of government of the ministry in an amount exceeding the provisions of this subsection.
(6) The constitutional institutions and the authorities in their area of administration shall follow subsection (4) of this section in the assumption of financial obligations for the upcoming budgetary years, unless otherwise determined by the state budget.
(7) The Riigikogu shall decide, for the resolution and prevention of a financial crisis that may cause difficulties related to liquidity or solvency for the financial institutions or significant disruptions in the payment and settlement systems, on the acquisition of shares and other holdings, and other financial assets and on the assumption of obligations or conclusion of financing transactions related to the amounts paid for the ensuring of financial stability of a foreign state, eurozone or a Member State thereof in an amount exceeding the provisions of the state budget. After the adoption of a resolution, the Government of the Republic shall submit to the Riigikogu a draft state budget amendment or a draft supplementary budget. The legislative proceeding of a draft state budget amendment or a draft supplementary budget shall not hinder the implementation of the resolution of the Riigikogu.
(1) The state may grant a loan or state guarantee:
1) for the performance of public duties;
2) to a financial institution or to secure the obligations of a financial institution in order to resolve or prevent a financial crisis that may cause difficulties related to liquidity or solvency, or significant disruptions in the payment and settlement systems;
3) to the persons specified in subsection 67 (1) of this Act, whose money is kept and invested by the state, or to secure their obligations;
4) to a company or to secure the obligations of a company, if the state has a majority interest in the company and if it is necessary to secure the interests of the state in the participation in such company;
5) for the ensuring of financial stability of a foreign state, eurozone or a Member State thereof.
(2) Granting a loan by the state shall mean granting the amount of money or credit based on a loan agreement or credit contract at the disposal of another person or acquisition of bonds issued by the borrower.
(3) A state guarantee shall mean a guarantee or other collateral granted by the state on the basis of this Act or another Act, excluding a short-term loan on securities specified in subsection 69 (1) of this Act and a collateral granted for the purpose of the financial risk management in the conclusion of derivative transactions related to the debt obligations of the state specified in subsection 70 (4) of this Act.
(4) The Riigikogu shall grant a loan or a state guarantee on the proposal of the Government of the Republic, otherwise provided by law. The Government of the Republic may grant a loan or on the basis of this Act a state guarantee in the amount determined pursuant to subsection (5) of this section to the persons specified in subsection (7) or to secure their obligations.
(5) The maximum permitted balance of loans granted by the Government of the Republic and state guarantees granted on the basis of this Act shall be determined in the state budget. In the determination of the aforementioned maximum permitted balance, the amount of the granted loans, guarantees and support to be repaid, and the forecasted need of granting these shall be taken into account.
(6) The term of a loan granted by the Government of the Republic or a state guarantee granted on the basis of this Act may be up to 30 years. The interest rate of a loan granted by the Government of the Republic shall not be lower than the interest rate at which the state would be able to assume debt obligations under similar conditions at the time of entry into a loan agreement.
(7) The Government of the Republic may grant a loan to or secure the obligations by a state guarantee on the basis of this Act of the following persons located or operating in Estonia:
1) legal persons in public law;
2) companies in which the state has a majority interest;
3) foundation established by the state;
4) financial institutions.
(8) Following the resolution by the Riigikogu or the Government of the Republic on granting a loan or on the basis of this Act of a state guarantee, the Ministry of Finance shall enter into the contracts necessary for granting the loan or state guarantee, conclude the transactions and organise the performance thereof.
(9) The procedure and specific conditions for applying for and granting of a loan and on the basis of this Act a state guarantee shall be established by a regulation of the Government of the Republic.
(1) A resolution on granting a state guarantee shall contain at least the following information:
1) the recipient of the state guarantee or the guaranteed person;
2) the intended purpose or objective of the state guarantee;
3) the amount and currency of the state guarantee;
4) the term of the state guarantee;
5) the state guarantee premium.
(2) A resolution on granting a loan shall contain at least the following information:
1) the borrower;
2) the intended purpose or objective of the loan amount;
3) the size of the loan amount;
4) the term of the loan;
(1) The Ministry of Finance shall have the right, on account of the maximum permitted balance of loans and state guarantees granted by the Government of the Republic and specified in subsection 61 (5) of this Act, to grant repayable support to a profit-making state agency.
(2) The amount of the repayable support specified in subsection (1) of this section and the specific conditions and procedure for the payment and repayment thereof, and the amount of remuneration paid for the use of the support and the specific conditions and procedure for the payment thereof shall be decided by the Minister of Finance.
(1) The Ministry of Finance shall execute the payments and settlements of the state authorities and intermediate in the payment services thereto (hereinafter execution of payments).
(2) A state authority shall have no current or payment account with a credit or financial institution, excluding if the Ministry of Finance has granted an authorisation therefor. When granting an authorisation, the Ministry of Finance may establish for a state authority the conditions for using such account.
(3) Unless the procedure for the receipt of the state budget revenue is determined by or on the basis of law, the Minister of Finance shall establish the procedure in the rules for the execution of payment established on the basis of subsection (4) of this section.
(4) The rules for the execution of payments shall be established by a regulation of the Minister of Finance.
(5) The Ministry of Finance shall ensure the operational continuity of the execution of payments. In case of any disruptions in the settlement systems, the Ministry of Finance is required to ensure the making of payments and settlements from the state budget.
(6) The Minister of Finance shall establish, by a regulation specified in subsection (4) of this section, the conditions for the payments from the state budget in case of any disruptions in the settlement systems and in the case specified in subsection 66 (4) of this Act in such way as to ensure:
1) the state functioning in an emergency, state of emergency, emergency situation and state of war;
2) the performance of the debt obligations of the state and other such obligations, where failure to perform the obligations may bring about the obligation to make immediate repayment of the debt obligations of the state or threaten the assumption of debt obligations for the state;
3) the payment of pensions and other social benefits;
4) the payment of the transferable tax to the social security funds and local governments;
5) the payments to the constitutional institutions and the authorities in their area of administration.
(1) The management of the state cash flow shall mean:
1) the conclusion of transactions with the liquid financial assets of the state;
2) the assumption of debt obligations for the state;
3) the management of financial risks related to the activities specified in clauses 1) and 2) of this subsection.
(2) The liquid financial assets of the state shall mean the cash, securities and other financial assets owned or kept by the state, which do not belong to the Stabilisation Reserve Fund.
(3) The Ministry of Finance shall manage the state cash flow.
(1) The amount of the liquid financial assets of the state and the opportunity to assume debt obligations shall be such as to ensure the making of the payments of the state and other persons specified in § 67 of this Act. In the assessment of the sufficiency of the amount of the liquid financial assets of the state and the opportunity to assume debt obligations, the probability of the realisation of the contingent liabilities of the state and the necessity to perform the payments related to the debt obligations of the state shall be taken into account.
(2) In the conclusion of transactions in cash, securities and other financial assets, the conservative investment principles shall be followed in order to ensure the liquidity of financial assets, value conservation and generating revenue.
(3) The restrictions on the assumption of obligations specified in § 60 of this Act shall not apply to the Ministry of Finance in the management of the state cash flow, unless otherwise provided by law.
(4) In case of an extensive or rapid economic decline, at the time of a financial crisis or in the event of lower receipts of revenue than planned, the Minister of Finance shall have the right to temporarily restrict the making of payments prescribed in the state budget, notifying the Government of the Republic thereof. The payment conditions provided for in subsection 64 (6) of this Act shall be followed when making the payments in such case.
(5) The principles of management of the state cash flow shall be established by a regulation of the Government of the Republic.
(1) The Ministry of Finance shall have the right, on the basis of law or contract, to keep and invest the money of legal persons in public law, legal persons in private law founded by the state or with state participation and legal persons in private law carrying out administrative duties of the state, to execute the payments and settlements of the persons and intermediate in the payment services thereto.
(2) The Ministry of Finance shall provide the persons specified in subsection (1) of this section with an opportunity to make payments at all times on account of the funds owned by them for the performance of the functions imposed thereon by the legislation. Subsection 64 (6) does not apply to the making of payments. The rules for the execution of payments specified in subsection 64 (4) of this Act shall apply to the execution of the payments and settlements of the aforementioned persons and intermediation in the payment services thereto.
(3) A state authority shall have the right to keep the money of another person in the case, under the conditions and pursuant to the procedure provided by law. Subsection 64 (6) does not apply to the making of payments of a person specified in this subsection.
(4) The Ministry of Finance shall manage the state cash flow and the cash flow related to the keeping and investment of the money of the persons specified in subsections (1) and (3) of this section on the basis of the principles specified in subsection 66 (5) of this Act as an integral whole, balancing the positive and negative cash flows of the persons.
(1) The Minister of Finance shall organise the performance of the financial obligations arising from the state guarantees granted on the basis of this Act on account of the liquid financial assets of the state.
(2) The Minister of Finance shall organise the due payment of the holding contributed at the request of the international financial institutions in which the state is a member or partner or the due performance of the financial obligations arising from the bonds issued by the state thereto on account of the liquid financial assets of the state, unless otherwise provided by law.
(3) The Government of the Republic or, with the authorisation of the Government of the Republic, the Minister of Finance shall decide on the performance of such financial obligations not specified in subsection (1) of this section and arising from the security provided by the state and court judgments and rulings, for which no funds are prescribed in the state budget and which cannot be performed on account of the funds in the reserve fund of the Government of the Republic, on account of the liquid financial assets of the state.
(1) The debt obligations of the state for the purposes of this Act shall mean the loans, overdrafts, short-term loans on securities taken, bonds issued and repurchase agreements of securities entered into for the management of the state cash flow, including to finance the state budget expenditure, investments and financing transactions.
(2) The maximum permitted balance of the debt obligations of the state shall be determined by the state budget.
(3) When determining the maximum permitted balance of the debt obligations of the state, the following shall be taken into consideration:
1) the balance of loans taken;
2) the necessity to finance the state budget expenditure, investments and financing transactions;
3) the necessity to perform and refinance the debt obligations of the state;
4) the potential necessity for granting loans;
5) the probability of the realisation of the contingent liabilities of the state.
(4) The maximum permitted balance of the debt obligations of the state determined by the state budget shall not apply upon the assumption of debt obligations during a state of war.
(5) The Riigikogu shall decide on the assumption of debt obligations for the state for the purpose of the acquisition of shares and other holdings, and other financial assets for the resolution and prevention of a financial crisis that may cause difficulties related to liquidity or solvency for the financial institutions or significant disruptions in the payment and settlement systems, or for the ensuring of financial stability of a foreign state, eurozone or a Member State thereof in an amount exceeding the maximum permitted balance of the debt obligations specified in subsection (2) of this section. After the adoption of a resolution, the Government of the Republic shall submit to the Riigikogu a draft supplementary budget or a draft state budget amendment. The legislative proceeding of a draft supplementary budget or a draft state budget amendment shall not hinder the implementation of the resolution of the Riigikogu.
(1) In the assumption of the debt obligations for the state, there shall be ensured the ratio of the financial risks and expenses related to the debt obligations, which would comply with the ability to perform the debt obligations of the state both in the short and long term.
(2) The Ministry of Finance shall be permitted to assume the debt obligations for the state within the maximum permitted balance of the debt obligations of the state specified in subsection 69 (2) of this Act. The Riigikogu shall grant, on the proposal of the Government of the Republic, an authorisation for the assumption of the debt obligations for the state in amount exceeding the specified balance.
(3) The Ministry of Finance shall enter into the contracts related to the assumption of the debt obligations, conclude the transactions and organise the performance thereof.
(4) The Ministry of Finance shall manage the financial risks associated with the debt obligations of the state. The Ministry of Finance shall have the right to demand and grant collaterals for the purpose of the financial risk management in the conclusion of derivative transactions related to the debt obligations of the state.
(5) The conditions for the assumption of the debt obligations for the state shall be established by a regulation of the Government of the Republic.
(6) The principles of management of the financial risks related to the debt obligations of the state shall be established by a regulation of the Government of the Republic specified in subsection 66 (5) of this Act.
(1) The Stabilisation Reserve Fund shall mean the financial reserve formed from the state funds in order to finance such expenditure, investments and financing transactions, which objective is:
1) the reduction of economic risks;
2) the prevention or mitigation of socio-economic crises;
3) the resolution or prevention of an emergency situation, a state of emergency, a state of war or other extraordinary situation or a crisis with material effect, or performance of the obligations provided for in a collective self-defence agreement;
4) the resolution and prevention of a financial crisis that may cause difficulties related to liquidity or solvency for the financial institutions or significant disruptions in the payment and settlement systems.
(2) The following shall be transferred to the Stabilisation Reserve Fund:
1) funds available therefor in the state budget;
2) funds to be entered in the Stabilisation Reserve Fund pursuant to a resolution on the distribution of the state unconsolidated cash flow surplus;
3) revenue received from the privatisation of state assets pursuant to law;
4) appropriations made to the state budget from the profits of Eesti Pank;
5) revenue received from administration of the Stabilisation Reserve Fund;
6) other funds provided by law.
(1) Administration of the Stabilisation Reserve Fund is the keeping and investment of the funds of the Stabilisation Reserve Fund.
(2) The administration of the Stabilisation Reserve Fund shall be organised by the Ministry of Finance.
(3) The objective of the administration of the Stabilisation Reserve Fund is to maintain the value and liquidity of the funds of the Stabilisation Reserve Fund and to obtain the maximum revenue possible within the framework of the established restrictions.
(4) The principles of the administration of the Stabilisation Reserve Fund and the management of financial risks relating thereto shall be established by a regulation of the Government of the Republic.
(1) A resolution on the use of the funds of the Stabilisation Reserve Fund shall be adopted by the Riigikogu on the proposal of the Government of the Republic. After the adoption of a resolution, the Government of the Republic shall submit to the Riigikogu a draft supplementary budget or a draft state budget amendment. The legislative proceeding of a draft supplementary budget or a draft state budget amendment shall not hinder the implementation of the resolution of the Riigikogu.
(2) The Ministry of Finance may, upon the consent of the Government of the Republic, for up to six months use the securities purchased on account of the funds of the Stabilisation Reserve Fund to secure the debt obligations of the state in case of an extensive or rapid economic decline or at the time of a financial crisis. The Ministry of Finance shall promptly notify the Riigikogu of the use of such right.
(1) The Ministry of Finance shall, not later than on the tenth working day of each quarter, submit a report to the National Audit Office, the Government of the Republic and the Finance Committee of the Riigikogu on the composition and value of the assets of the Stabilisation Reserve Fund as at the last working day of the previous quarter.
(2) The report specified in subsection (1) of this section shall set out at least the following:
1) the market value of the funds of the Stabilisation Reserve Fund and the change in the value compared to the end of the quarter preceding the accounting period and the beginning of the accounting year;
2) the contributions to and payments from the Stabilisation Reserve Fund as summary amounts;
3) the return of the Stabilisation Reserve Fund;
4) the overview of the investment structure of the Stabilisation Reserve Fund by financial assets, major issuers and credit institutions, credit ratings, currency and sectors;
5) the average duration of the Stabilisation Reserve Fund investments.
(3) The Ministry of Finance shall publish the report specified in subsection (1) of this section on its website after the session of the Government of the Republic where the report was discussed.
The Ministry of Finance shall monitor the implementation of the state budget and provide an overview thereof to the Government of the Republic at least twice a year.
(1) The financial control system is part of the internal control system, which comprises the planning, use and monitoring of use of the budget funds of a state authority. The objective of the financial control system is to ensure the economical, efficient, effective, legitimate and transparent use of the state budget funds.
(2) The head of a state authority shall be responsible for the implementation and efficiency of the financial control system.
(1) The annual reports of the state shall mean the annual reports of the state accounting entities and the consolidated annual report of the state. The reports shall be prepared according to the Accounting Act.
(2) The National Audit Office shall perform the audit of the annual accounts constituting part of the consolidated annual report of the state and the annual accounts of a state accounting entity. The National Audit Office shall verify the lawfulness of the transactions of the state and state accounting entities.
(3) An audit firm appointed by the Riigikogu pursuant to the National Audit Office Act shall audit the annual accounts and verify the lawfulness of the transactions of the National Audit Office.
(4) The National Audit Office may, in the course of an audit or verification of the lawfulness of the transactions specified in subsection (2) of this section, rely on the provisions of the report of a sworn auditor documented for the purposes of § 54 of the Auditors Activities Act in the audit of the annual accounts of the state consolidation group entity or on the basis of the verification of the lawfulness of the transactions.
(1) A state accounting entity, with the exception of the National Audit Office, shall prepare an annual report and submit it to the National Audit Office not later than by 30 April of the year following the accounting year. In the course of an audit, the state accounting entity may correct and amend the report.
(2) The National Audit Office shall complete the audit of the annual accounts of a state accounting entity and the verification of the lawfulness of the transactions not later than by 30 June of the year following the accounting year.
(3) A state accounting entity, with the exception of the National Audit Office, shall submit the annual report together with the audit report published by the National Audit Office with regard to the audit of the annuals accounts and the verification of the lawfulness of the transactions of a state accounting entity to the Ministry of Finance within seven working days after the receipt of the report from the National Audit Office and publish the submitted document on its website. The Minister of Finance shall submit to the Government of the Republic the annual reports of the ministries together with the audit report prepared by the National Audit Office within seven working days after the receipt of the latest annual report and the audit report belonging thereto.
(4) The Government of the Republic shall decide on the approval of the annual report of a ministry provided in subsection (3) of this section not later than by 31 July of the year following the financial year.
(1) The Ministry of Finance shall submit the consolidated annual report of the state to the National Audit Office not later than by 30 June of the year following the accounting year. The report submitted to the National Audit Office shall be published on the website of the Ministry of Finance immediately after the submission of the report. In the course of an audit, the Ministry of Finance may correct and amend the report.
(2) The National Audit Office shall complete the audit of the annual accounts of the consolidated annual report of the state and the verification of the lawfulness of the transactions not later than by 31 August of the year following the accounting year.
(3) The Ministry of Finance shall submit the consolidated annual report of the state together with a draft resolution regarding the distribution of the state unconsolidated cash flow surplus and the audit report of the National Audit Office published with regard to the audit of the annual accounts of the consolidated annual report of the state and the verification of the lawfulness of the transactions to the Government of the Republic for approval within seven working days as of the receipt of the report from the National Audit Office and publish the report on its website immediately after the submission to the Government of the Republic. The Government of the Republic shall submit the approved consolidated annual report of the state to the Riigikogu for approval together with a draft resolution regarding the distribution of the state unconsolidated cash flow surplus. The audit report of the National Audit Office shall be enclosed to the consolidated annual report of the state.
(4) A resolution regarding the distribution of the state unconsolidated cash flow surplus shall be prepared pursuant to the provisions of the Accounting Act.
(5) After the completion of the consolidated annual report of the state, but not later than by 31 July of the year following the accounting year, the Fiscal Council shall provide an opinion regarding the achievement of the structural budget position objective of the general government sector.
(1) A regulation issued on the basis of subsection 10 (2) of the State Budget Act in force until the entry into force of this Act shall be effective shall be effective after the entry into force of this Act in so far as it is not in conflict with this Act, until the revocation thereof by a regulation specified in subsection 20 (5) of this Act.
(2) A regulation established on the basis of subsection 48 (4) of this Act shall be applied to the distribution of the funds of the support fund planned for the area of government of a ministry in the state budget as of 1 January 2017.
(3) Subsection 60 (3) of this Act shall apply for the first time with regard to the 2015 State Budget Act.
(1) As of the entry into force of this Act, subsection 2 (12) and §§ 4, 6–10, 12, 14 and 16 of the 2014 State Budget Act shall not apply.
(2) The maximum permitted total balance of the debt obligations of the state specified in subsection 69 (2) of this Act in 2014 shall amount to 2,500,000,000 euros.
(3) The maximum permitted balance of loans and state guarantees granted by the Government of the Republic and specified in subsection 61 (5) of this Act in 2014 shall amount to 610,000,000 euros.
§ 82. – § 108.Omitted from this translation
The State Budget Act (RT I 1999, 55, 584) is repealed.
§ 110. – § 125.Omitted from this translation
(1) Subsection 47 (3), subsections 48 (4)–(6) and § 49 of this Act enter into force on 1 January 2015.
(2) Subsection 48 (3), subsections 50 (2) and (3) and §§ 51 and 110 of this Act enter into force on 1 January 2017.
(3) Sections 108 and 120 of this Act enter into force on 1 January 2019.
1Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States (OJ L 306, 23.11.2011, p. 41–47).
Laine Randjärv
Vice-President of the Riigikogu
