JUAN CARLOS I REY OF SPAIN

To all who present it and understand it.

Sabed: That in the General Cortes they have approved and I come to sanction the following law.

PREAMBLE

The existence of fiscal rules that discipline the decisions of those responsible for economic policy, contributes to improving the expectations of the economic agents and encourages an allocation of the most efficient public expenditure.

In the framework of the necessary regulatory rationalisation, Spain has provided specific legislation aimed at ensuring fiscal discipline through Law 18/2001 of 12 December, General for Budgetary Stability, and The Organic Law 5/2001, of 13 December, complementary to that Law. These instruments have been shown to be effective in improving budgetary management, particularly in terms of the State General Administration and the State public sector. However, in other respects, the experience of its implementation has revealed shortcomings in the stability laws which require it to be amended in order to adapt them to the reality of a decentralised State in which several Member States are involved. Public administrations and the requirements of economic policy.

I

The first element that needs to be reformed is the mechanism of interaction between the various public administrations to ensure respect for the laws of budgetary stability to the financial autonomy of the Communities. Autonomous.

The commitment to budgetary stability is a collective good for all citizens, which can only be achieved if it has the involvement of all those responsible for public finances, both in the State-level as in the regional and local. The resources of unconstitutionality that several Autonomous Communities brought before the Constitutional Court against the laws of stability reveal, subject to the judgment that in the end, the supreme interpreter of our Magna Carta, that the Current laws have failed to make the necessary support for the administrations to be achievable. This reform introduces a new mechanism for the determination of the objective of stability of the territorial public administrations and their respective public sectors, supported by dialogue and negotiation. Thus, the objective of stability of each Autonomous Community will be agreed with the Ministry of Economy and Finance after a bilateral negotiation, without prejudice to the fact that, ultimately, it is to the General Courts and the Government to which it corresponds. to take the essential decisions on economic policy, in accordance with the provisions of Article 149.1.13. of the Constitution. The new mechanism will therefore respect financial autonomy with the objectives of general economic policy. Also because of the need to strengthen the constitutional principles of solidarity, cooperation, coordination and mutual loyalty among the various territorial entities, the role of the Fiscal and Financial Policy Council of the Autonomous Communities and the National Commission of Local Administration as multilateral coordination bodies between the General Administration of the State, the Autonomous Communities and the Local Entities.

II

The second element that needs to be reformed is the regulation of information provision obligations to further develop the principle of transparency.

While Law 18/2001 of 12 December, General for Budgetary Stability, which is reformed in accordance with the principle of transparency, its practical application was not expressly collected, the application of the principle has been in some cases deficient. Transparency in the execution and liquidation of public budgets is a prerequisite for the benefits expected from the existence of clear and precise fiscal rules to have positive effects on economic activity. In a context in which the autonomy of each public administration is required, transparency and information are the main tools for disciplining the decisions of the managers of economic policy and allowing for control. The Commission has also made a number of important points in this respect, and I would also point out that the Commission is not aware of this. In this respect, the present reform improves and makes explicit the obligations relating to the circulation of information between the various territorial agents, directly and through the Council of Fiscal and Financial Policy, as well as the access to of the citizens to that information. Another important aspect in which transparency is increased is the aggregation of the budgetary balances of the State and the Social Security which gives rise to a confusion in the Law in force between the objectives of stability of the State and of the Security Social, in such a way that the surplus of the latter dissipates the deficit of the former. With this reform, the objective of stability of the State of Social Security is totally separated, the more so the latter must attend to the demographic and social considerations in the medium and long term.

III

The laws in force apply the principle of stability with rigidity, regardless of the economic situation, so that not only is the ability to combat the cycle lost, but even policies of pro-cyclical character. While the balance in public accounts is an essential element of a sustainable economic policy in time, it must be used to adapt it to the cyclical situation of the economy in order to soften its fluctuations. This will require a surplus in situations where the economy grows above its potential, which will be used to offset deficits when the economy is in the opposite situation. In short, it is a question of adapting budgetary policy to the economic cycle in order to soften it.

However, the determination of the cyclical position of the economy and its consequences on the sign of budgetary policy is subject to explicit regulation and will follow a transparent procedure. On the other hand, and with an aggregate limit for the whole of the Administrations, the investment programmes will be authorized to show a significant impact on the increase in productivity. Such investment programmes should be financed in a significant proportion, in no case less than 30%, with gross savings of the public administration concerned and only partly with debt. The limit of the investments eligible for this treatment is set at 0.5% of the gross domestic product envisaged for each financial year. This criterion is independent of the cyclical deficit agreed and the deficits in which it is possible. (a) the period of application of the economic and financial rebalancing plans may be limited, but may be limited in terms of the volume and the evolution of the debt.

IV

With regard to the application of the principle of budgetary stability in the area of Local Entities, the reform meets the following criteria and objectives.

First, the Law distinguishes between two types of Local Entities, those included in the subjective scope defined in Article 111 of the Recast Text of the Law of Local Government, approved by Royal Decree Legislative measures of 5 March, to some of which will apply to them, as well as for the State and the Autonomous Communities, the principle of budgetary stability understood as the situation of equilibrium or of a computed surplus, long of the economic cycle; secondly, the rest of the Local Entities that have to adjust their Budgets for the principle of budgetary stability understood as the balance or surplus situation. Also, the obligations relating to the circulation of information, as well as the access of citizens to such information, are improved. The previous ones have been the essential reasons for the reform of Law 18/2001, General of Budgetary Stability and of the Organic Law 5/2001, of December 13, initiated in aspects of procedure and processing by Law 2/2004, December 27, General State Budget for the year 2005, although most of the regulation of those laws is maintained, although improving it in order to consolidate definitively the progress made, making progress in the process. undertaken.

Single item. Amendments to Law 18/2001 of 12 December 2001 General for Budgetary Stability.

The following precepts of Law 18/2001 of 12 December, General of Budget Stability, are amended. One. Article 3 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 3. Principle of budgetary stability.

1. Budgetary stability shall mean, in relation to the subjects referred to in Article 2 (a) and (c) of this Law, the balance or surplus situation computed over the course of the economic cycle in terms of the capacity of the financing in accordance with the definition contained in the European System of National and Regional Accounts, and under the conditions laid down for each of the public administrations. The persons referred to in Article 2 (2) (d) of this Law shall be subject to the principle of stability in the terms laid down in Article 19 of Law. 2. Budgetary stability shall be understood in relation to the subjects to whom refers to Article 2.1.b) of this Law, the balance or surplus situation computed in terms of financing capacity in accordance with the definition contained in the European System of National and Regional Accounts. 3. The preparation, approval and implementation of the budgets of the subjects referred to in Article 2.2 of this Law shall be carried out within a framework of budgetary stability. Budgetary stability shall be understood in relation to those subject to the position of financial equilibrium. '

Two. Article 5 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 5. Principle of transparency.

The budgets of the subjects falling within the scope of this Law and their settlements shall contain sufficient and adequate information to enable the verification of the adequacy of the stability principle. (a) budgetary stability and compliance with the objective of budgetary stability and compliance with the obligations imposed by the Community rules on national accounts. '

Three. Article 6 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 6. Principle of efficiency in the allocation and use of public resources.

1. Public expenditure policies should be established taking into account the economic situation and the fulfilment of the objective of budgetary stability, and shall be implemented by means of an efficient management of public resources. efficiency and quality. 2. The laws and regulations, in their preparation and approval stage, the administrative acts, contracts and collaboration agreements and any other actions of the subjects referred to in Article 2 of this Law (a) to affect public expenditure, to assess its impact and effects, and to be strictly subject to compliance with the requirements of the principle of budgetary stability. '

Four. The name of Title II of Law 18/2001 of 12 December, General of Budgetary Stability, which becomes the following, is amended:

Budget stability of the public sector.

Five. Article 7 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 7. Implementation of the principle of budgetary stability.

1. The preparation, approval and implementation of the budgets of the various subjects referred to in Article 2.1.a (c) and (d) of this Law shall be carried out on a general basis in balance or in budgetary surplus computed in terms of capacity financing in accordance with the definition contained in the European System of National and Regional Accounts. 2. Exceptionally, the subjects referred to in Articles 2.1.a) and C) and 19.1 of this Law may present a deficit in those financial years. for which, on the basis of the report provided for in Article 8 (2) of this Law, provision is made for a growth below the rate of change in the real national gross domestic product referred to in the following paragraph. In this case, the administration which provides for a deficit must submit to the Ministry of Economic and Finance a multi-annual report showing that the expected development of the budgetary balances, calculated in the form set out in the Previous section ensures stability over the course of the cycle. 3. The Council of Ministers, acting on a proposal from the Minister for Economic Affairs and Finance and with the report of the Fiscal and Financial Policy Council of the Autonomous Communities and the National Commission for Local Administration, will fix a period of three years. budgetary years the rate of change in the real national gross domestic product which determines the economic growth threshold below which the subjects referred to in the previous paragraph may exceptionally present a deficit. It shall also fix for the same period the rate of change in the real national gross domestic product which determines the economic growth threshold above which the subjects concerned shall be in surplus. 4. Once the variation rates referred to in the previous paragraph are fixed, those rates may not be modified until the period for which they were established. However, if exceptional circumstances so warrant, the Council of Ministers, acting on a proposal from the Ministry of Economic Affairs and Finance, prior to the report of the Fiscal and Financial Policy Council of the Autonomous Communities and of the National Local Administration Commission may modify those fees before their term of validity. 5. Regardless of the objective of stability laid down for the public sector as a whole and for each of the groups of agents included in it, as provided for in Article 8 of this Law, as well as those fixed individually for each Autonomous Community and Local Entity, and, where appropriate, in addition to the deficit set in those objectives, by way of exception, the subjects covered by Articles 2.1.a) and C) and 19.1 of this Act may present a deficit where the to finance investment increases in programmes aimed at serving productive activities, including those for research, development and innovation. The amount of the deficit resulting from these programs will not be able to exceed, in total and annual accounts, 0.20 percent of the national gross domestic product for the state, 0.25 percent of the national gross domestic product for all of the Autonomous Communities and 0.05 percent of the national gross domestic product for the Local Entities referred to in Article 19.1 of this Law. 6. It corresponds to the Ministry of Economy and Finance, based on the general criteria established, in its respective field of action, by the Council of Fiscal and Financial Policy of the Autonomous Communities and the National Commission of Administration. Local and to produce the effects provided for in this article, to authorize the investment programs of the Autonomous Communities and the Local Entities, for which consideration will be taken into account the contribution of such projects to the improvement of the productivity of the economy and the level of indebtedness of the Autonomous Community and Local Entity. In any event, the investment programme must be financed at least 30% of the gross savings of the Proposer Administration. Of the investment programmes submitted by the subjects referred to in the previous paragraph and of their authorization by the Ministry of Economy and Finance, knowledge shall be given to the Council of Fiscal and Financial Policy of the Communities. Autonomous and the National Commission of Local Administration, in their respective sphere of competence. 7. The preparation, approval and implementation of the budgets of the subjects referred to in Article 2.1.b of this Law shall be carried out in balance or in budget surplus computed in terms of financing capacity in accordance with the definition contained in the European System of National and Regional Accounts. 8. The subjects falling within the scope of this Law shall be obliged to establish in their budgetary rules the instruments and procedures necessary to bring them into line with the application of the principle of budgetary stability. 9. It is for the Government of the Nation, without prejudice to the powers of the Fiscal and Financial Policy Council of the Autonomous Communities, to ensure the application of the principle of budgetary stability throughout the public sector. "

Six. Article 8 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 8. Establishment of the objective of budgetary stability.

1. In the first half of each year, the Government, by agreement of the Council of Ministers, on a proposal from the Ministry of Economy and Finance and after the report of the Fiscal and Financial Policy Council of the Autonomous Communities and the Commission National of Local Administration as regards the scope of the same, shall set the objective of budgetary stability referred to the following three exercises, both for the public sector as a whole, and for each of the groups of agents covered by Article 2.1 of this Law. This objective shall be expressed in percentage terms of the national gross domestic product. 2. The proposal for the fixing of the stability objective shall be accompanied, for the purposes of Articles 3.1 and 7.2 of this Law, of a report assessing the stage of the economic cycle envisaged for each of the years referred to above. on the time horizon for the fixing of that objective. This report will be prepared by the Ministry of Economy and Finance, after consulting the National Statistics Institute and the Banco de España on the cyclical position of the Spanish economy, and taking into account the Central Bank's forecasts. European Commission and the European Commission. It shall contain the economic table for a multiannual horizon and shall take into account, inter alia, the following benchmarks: the forecast for the evolution of the national gross domestic product and the spread of its growth potential; expected behavior of financial markets, labor market and foreign sector, inflation forecasts, borrowing needs, revenue and public expenditure projections in relation to Gross Domestic Product, and sensitivity analysis of the forecast. If the report provides for a higher economic growth than the rate of change for the Spanish economy, the objective of the stability of the subjects covered by this Law is the objective of the stability of the subjects covered by this Law. Article 2 (a) and (c) and (c) and 19.1 of this Law must necessarily be in surplus, without prejudice to the provisions of Article 193.1 to 3 of the recast text of the Local Government Law, approved by Royal Decree-Law No March 5, for Local Entities. In this case, the objective of stability will be determined taking into account the degree of convergence of the Spanish economy with the European Union in research, development and innovation and in the development of the information society. If the growth forecast is among the variation rates fixed in accordance with Article 7.3 of the Law, these subjects shall at least present a budgetary balance. In the event that the report provides for a lower economic growth than the rate of change that has been fixed in accordance with Article 7.3 of this Law, such subjects may present a deficit. In this case, the deficit in which they will be able to incur the total count will not be able to exceed 1 percent of the national gross domestic product, with the limit of 0.20 percent of the national gross domestic product for the state, of 0.75 percent of the Domestic Gross Domestic Product for the whole of the Autonomous Communities and 0.05 percent of the national gross domestic product for the Local Entities referred to in Article 19.1 of this Law. The objective of the stability of the subjects referred to in Article 2.1.b of this Law shall be determined on the basis of forecasts for demographic and economic developments in the medium and long term. 3. The agreement of the Council of Ministers containing the objective of budgetary stability shall be forwarded to the General Cortes accompanied by the report referred to in the preceding paragraph. In succession, and after the corresponding debate in plenary, the Congress of Deputies and the Senate will decide to approve or reject the objective of stability proposed by the government. If the objective of stability by the Congress of Deputies were approved, the objective will be submitted to a new vote of the Congress, approving if it is ratified by a simple majority. 4. Approved the objective of stability by the General Cortes, the elaboration of the Draft Law on the General Budget of the State will have to accommodate this objective. If it is rejected, the government shall, within a maximum of one month, submit a new agreement to be submitted to the same procedure. 5. The report of the Fiscal and Financial Policy Council referred to in paragraph 1 of this Article, as well as the agreements of the Council for the implementation of the objective of budgetary stability, shall be forwarded by the Secretariat. Permanent of that Council to the General Commission of the Autonomous Communities of the Senate, for their knowledge. "

Seven. Article 9 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 9. Reports on compliance with the objective of budgetary stability.

1. Before 1 October each year, the Minister for Economic Affairs and Finance shall report to the Government on the extent to which the objective of budgetary stability for the preceding financial year and cyclical developments are met. the actual exercise and deviations from the initial forecast contained in the report referred to in Article 8.2 of this Law. 2. The Minister of Economy and Finance shall report to the Fiscal and Financial Policy Council of the Communities Autonomous and to the National Commission of Local Administration, in their respective field of competence, on the degree of compliance with the objective of budgetary stability in the previous immediate financial year. 3. The reports referred to in this Article shall be published for general knowledge. "

Eight. Article 10 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 10. Consequences of non-compliance with the objective of budgetary stability.

1. In the event of a risk of non-compliance with the objective of budgetary stability, the Government of the Nation may issue a warning to the Responsible Administration. This warning will be given by the Government to the Council of Fiscal and Financial Policy of the Autonomous Communities, if the warning is an Autonomous Community, and to the National Commission of Local Administration, if is a Local Entity. 2. Failure to comply with the objective of stability that consists of a higher deficit of the fixed term will require the formulation of a three-year economic-financial plan of rebalancing, with the content and scope provided for in this Law and in The Organic Law 5/2001, complementary to it. 3. To assess the degree of compliance with the objective of budgetary stability of each of the subjects falling within the scope of Article 2.1 of this Law, account shall be taken of the real development of the economy in the financial year. (a) the budget for the initial forecast contained in the report referred to in Article 8.2 of this Law. In the light of the circumstances set out in the preceding paragraph, the Government may propose to the Council for Fiscal and Financial Policy of the Autonomous Communities and the National Commission for Local Administration, as appropriate, non-application to the certain Autonomous Communities and Local Entities of the rebalancing plan. 4. Compliance with the objective of stability shall be taken into account in the authorization of credit operations and debt issues of the Autonomous Communities and Local Entities in the terms provided for in Articles 23 of this Law, The Organic Law 5/2001, of 13 December, 14 of the Organic Law 8/1980, of 22 September, of Financing of the Autonomous Communities and 53 of the Recast Text of the Law Regulatory of the Local Government, approved by Royal Legislative Decree 2/2004, dated March 5. 5. The subjects listed in Article 2 of this Law which, in breach of the obligations contained therein or the agreements which were adopted by the Ministry of Economy and Finance or by the Council of Fiscal Policy and Financial institutions of the Autonomous Communities, which cause or contribute to the production of non-compliance with the obligations assumed by Spain vis-à-vis the European Union as a result of the Stability and Growth Pact, will assume in the the liability for such non-compliance would have been derived. In the process of taking financial responsibility referred to in the preceding paragraph, the hearing of the Administration or entity concerned shall be guaranteed. "

Nine. The name of Chapter II of Title II of Law 18/2001 of 12 December, General of Budgetary Stability, which is worded as follows:

"State public sector budget stability."

Ten. Article 11 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 11. Multiannual budgetary scenario.

Prior to the process of drawing up the General Budget of the State, the Ministry of Economy and Finance will draw up multi-annual forecast scenarios for revenue and expenditure under the terms envisaged. In Law 47/2003 of 26 November, General Budget. '

Once. Article 12 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 12. Annual ceiling of expenditure.

The agreement provided for in Article 8 of this Law shall fix the amount which, in the budgetary allocation process to be completed with the approval of the General Budget of the following financial year, shall constitute the the ceiling on non-financial expenditure of the State Budget. "

Twelve. Article 13 of Law 18/2001 of 12 December, General for Budget Stability, is amended, which is as follows:

" Article 13. Implementation of the principle of transparency.

1. In accordance with the principle of transparency, the draft law on the general budget of the State shall be accompanied by precise information to relate the balance, deficit or budget surplus to the calculated balance, deficit or surplus in accordance with the rules of the European System of National and Regional Accounts. In the case of a deficit, it must also be accompanied by a multi-annual report showing that the expected development of the budgetary balances, calculated in terms of the financing capacity in accordance with the definition contained in the European System of National and Regional Accounts, ensures stability over the course of the cycle. To all the above will be joined the forecasts regarding the following: the need for State financing, the investments of the public enterprises, the ratio public expenditure of the State in relation to the National Gross Domestic Product and the level of Government debt in the following financial year. 2. The Ministry of Economy and Finance shall inform the Fiscal and Financial Policy Council of the Autonomous Communities and the National Commission of Local Administration of the spending limit provided for in Article 12 of this Law. "

Thirteen. Article 14 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 14. Correction of the situation of non-compliance with the objective of stability.

1. Where the budgets of the subjects referred to in Article 2.1 (a) of this Law are presented in breach of the objective of stability with a higher deficit of the fixed, or, exceptionally, the budgets of the subjects are presented Article 2.1 (b) of this Law in the position of deficit, the Government will forward to the General Cortes an economic-financial plan of rebalancing, which will contain the definition of the policies of income and expenditure that is necessary apply in order to correct that situation within the maximum period of the three budgetary years next. 2. When economic or administrative conditions not foreseen at the time of the approval of the economic-financial plan are present, the Government may submit to the General Courts an amending plan of the initial plan. 3. The Economic and Financial Reequilibrium Plan and, where appropriate, the Amending Plan of the initial plan referred to in the preceding paragraphs of this Article shall be dealt with in accordance with the provisions of Article 8.3 of this Law. "

Fourteen. Article 16 of Law 18/2001 of 12 December, General for Budget Stability, is amended, which is worded as follows:

" Article 16. Credit modifications.

Extraordinary credits, credit supplements, extensions and credit additions, as provided for in Law 47/2003 of 26 November, General Budget and other legal provisions, will be financed by the use of the 'budgetary implementation contingency fund' or by means of a reduction in other appropriations. Without prejudice to the provisions of the preceding paragraph, the credit changes of the subjects referred to in point (b) of Article 2.1 of this Law shall be financed in the form set out in Articles 54.3 and 57.2 of Law 47/2003, of 26 November, General Budget. "

Fifteen. Article 17 of Law 18/2001 of 12 December 2001 General for Budgetary Stability is amended, which is worded as follows:

" Article 17. Balance of budgetary settlement.

1. In the event that the budgetary clearance of the subjects listed in Article 2.1 (a) and (b) of this Law presents a deficit situation in breach of the objective of stability, the Government shall forward to the Cortes a economic and financial balance plan which shall be in accordance with the provisions of Article 14 of this Law. 2. In the event that the budgetary settlement is in a surplus position, it shall apply as follows: (a) The General Administration of the State will reduce its net borrowing. (b) In the Social Security System, priority shall be given to the Social Security Reserve Fund in order to meet the future needs of the system. "

Sixteen. The name of Chapter III of Title II of Law 18/2001 of 12 December, General of Budgetary Stability, which is worded as follows:

"Budgetary Stability of Local Entities."

seventeen. New wording is given to Article 19 of Law 18/2001 of 12 December, General Budget Stability, which is worded as follows:

" Article 19. Implementation of the principle of budgetary stability of Local Entities.

1. From among the Local Entities included in the subjective field defined in Article 111 of the Recast Text of the Local Government Law, approved by Royal Legislative Decree of March 5, the National Commission of Local administration, on a proposal from the associations of the local authorities represented in it, will establish each year those which, in the field of their competences, will adjust their budgets to the principle of budgetary stability understood as the balance or surplus situation in the economic cycle, in terms of the economic cycle, the financing capacity in accordance with the definition contained in the European System of National and Regional Accounts. If no proposal is received in the National Local Administration Commission, the entities referred to in this paragraph will be determined by the Government. 2. By way of exception, the Local Entities to which they are refers to the previous paragraph when it is intended to finance investment increases in programmes intended to serve productive activities. The amount of the deficit arising from those programmes shall not exceed the percentage of consolidated non-financial income, in the light of the entities referred to in Article 2 (2) (d) of this Law, of the immediately preceding financial year of the Respective Local entity that the National Commission of Local Administration to the effect establishes, on the proposal of the associations of the Local Entities represented in it. To this end, the National Commission of Local Administration shall give a decision within the period of 15 days, within the limit set by article 7.5 of this Law for Local Entities. If a proposal is not made, the individual limit of each Local Entity will be set by the Government. The investment programmes shall be subject to the authorization of the Ministry of Economic Affairs and Finance in the terms, with the content and limits laid down in Article 7 (1) of this Law and in the form that they regulate. set. Of the investment programs presented by the subjects referred to in this paragraph and of their authorization by the Ministry of Economy and Finance, knowledge will be given to the National Commission of Local Administration. 3. The rest of the Local Entities, in the field of their competences, will adjust their budgets to the principle of budgetary stability understood as the situation of balance or surplus in terms of financing capacity according to the definition contained in the European System of National and Regional Accounts. "

Eighteen. New wording is given to Article 20 of Law 18/2001 of 12 December, General Budget Stability, which is worded as follows:

" Article 20. Objective of budgetary stability of the Local Entities.

1. The Ministry of Economy and Finance will formulate the proposal for the objective of budgetary stability for the whole of the Local Entities, a proposal that will be submitted to the National Commission for Local Administration prior to its 2. The National Commission of Local Administration, which shall act as a collaboration agency between the State Administration and the Local Entities in respect of the matters covered by this Law, shall have at most of 15 days for the issue of the report prior to the agreement referred to in the preceding paragraph. That period shall be counted from the date of receipt of the proposal in accordance with the Secretariat of the Commission. 3. Where the report referred to in Article 8 (2) of this Law provides for economic growth below the rate which has been fixed in accordance with the provisions of Article 7.3 of this Law, the Local Entities referred to in Article 8 (2) of this Law shall be subject to the provisions of Article 8 (1) of this Law. Article 19 (1) may present a deficit which may not exceed the percentage of the consolidated non-financial income of the respective Local Entity established by the National Commission of Local Administration, on a proposal from the associations of the Local Entities represented in it. To this end, the National Commission of Local Administration shall decide within the term of an unextendable period of 15 days, within the limit set by Article 8.2 of this Law for Local Entities. If a proposal is not made, the individual limit of each Local Entity shall be fixed by the Government. "

nineteen. New wording is given to Article 21 of Law 18/2001 of 12 December, General Budget Stability, which is worded as follows:

" Article 21. Provision of information.

1. For the effective implementation of the principle of transparency and the other principles laid down in this Law, the Ministry of Economy and Finance may obtain from the Local Entities the necessary information for the purposes referred to in Article 5. 2. The concreteness and procedure of the information to be provided will be the subject of development by Order of the Minister of Economy and Finance, prior to the report of the National Commission of Local Administration. This Order shall also set the time limit for the reference of information, which shall not exceed 30 calendar days from the end of the time period fixed for periodic referrals, and from the fact that it determines the variation of data with respect to the information previously sent for non-periodic referrals. 3. The information provided shall contain at least the following items on the basis of the period considered: (a) By the Local Entities included in Article 19 (1) of this Law, quarterly information: Revenue and expenditure budget, or, where appropriate, balance sheet and the results of the results of the subjects referred to in Article 2 (2) (d) of this Law. (b) Annual information: 1. General budget or estimates of revenue and expenditure of each of the entities of the subjects covered by Article 2 (2) (d) of this Law. 2. Liquidation of the revenue and expenditure budget of the subjects Article 2 (2) (d) of this Law. 3. Functional classification of expenditure. 4. Obligations recognised against third parties, due, liquid, enforceable and not satisfied, not charged to the budget. 5. Avales awarded. 6. State of treasury accounts. 7. State of the debt. 8. Detail of transactions in financial assets carried out by the subjects covered by Article 2.1.d) of this Law, with particular reference to financial contributions to commercial companies and public entities. 9. Annual accounts of the subjects covered by Article 2 (1) (d) and (2) of this Law that are subject to the General Accounting Plan of the Private Company. c) Non-periodic information: Detail of all units dependent on the Local Entity included in the scope of this Law, necessary for the training and maintenance of an inventory updated by the Ministry of Economy and Hacienda. '

Twenty. New wording is given to Article 22 of Law 18/2001 of 12 December, General Budget Stability, which is worded as follows:

" Article 22. Correction of situations of non-compliance with the objective of stability.

1. Local Entities that have not met the stability objective set out in Article 20 of this Law shall be required to approve the Corporation's plenary session within three months of the approval or liquidation of the Corporation. Budget or approval of the General Account in a situation of imbalance, of an economic-financial plan of rebalancing to a maximum period of three years. This plan shall include the activities to be carried out and the measures to be taken in relation to the regulation, implementation and management of expenditure and revenue, in order to ensure a return to a situation of budgetary stability. 2. In the case of the Local Entities included in the subjective scope defined in Article 111 of the Recast Text of the Local Government Law Regulatory Law, approved by Royal Legislative Decree of March 5, the plan The economic and financial balance will be sent for approval to the Ministry of Economy and Finance, which, in addition, will be the body responsible for its monitoring, except in the case of the Autonomous Community in whose territory the Local entity has the jurisdiction of financial guardianship on the Entities in its Statute of Autonomy Local. In the latter case, the economic-financial plan will be sent to the corresponding Autonomous Community, which will be responsible for its approval and follow-up. The Autonomous Community concerned shall send information to the Ministry of Economy and Finance of these plans and the results of the monitoring carried out on them. 3. The economic-financial rebalancing plans shall be submitted for knowledge to the National Commission of Local Administration. These plans will be given the same publicity, for purposes exclusively informative, than that established by the Laws for the Budgets of the Entity. "

Twenty-one. New wording is given to Article 23 of Law 18/2001 of 12 December, General Budget Stability, which is worded as follows:

" Article 23. Authorization of credit operations and debt issuance.

1. The authorization of the Local Entities to carry out credit operations and debt issues, in compliance with the provisions of Article 53 of the Recast Text of the Local Government Law Regulatory Law, approved by the Royal Decree Legislative 2/2004, of 5 March, will take into account the fulfilment of the objectives of budgetary stability. 2. The Local Entities included in the subjective area defined in Article 111 of the Recast Text of the Local Government Law Regulatory Law, which, in breach of the objective of stability, has approved an economic-financial plan of rebalance must subject to administrative authorisation the long-term credit operations which they intend to conclude. 3. In addition, the Local Entities referred to in the preceding paragraph shall apply for authorization to arrange for any borrowing operation, regardless of their time limit, when they have not presented the economic-financial plan or the non-financial plan. has been approved by the Ministry of Economy and Finance or, where appropriate, by the corresponding Autonomous Community. 4. Other Local Entities that fail to meet the stability objective shall be required to apply for long-term credit operations in the cases referred to in Article 53 (1) and (2) of the recast of the Law. Regulation of Local Authorities, and shall set out, in the relevant application, the measures to correct the budgetary imbalance approved. 5. In any event, the Ministry of Economy and Finance shall be authorized to carry out the operations referred to in Article 53 (5) of the Recast Text of the Local Government Law. "

Twenty-two. New wording is given to Article 24 of Law 18/2001 of 12 December, General Budget Stability, which is worded as follows:

" Article 24. Central information.

The Ministry of Economy and Finance will maintain a public data center providing information on credit operations, debt issuance or any other credit or risk-taking appeal. financial charges arising from them, as agreed by the General Administration of Local Entities and other dependent persons, referred to in Article 2 (2) (d) and (2) of this Law, in the terms of Article 55 of the Text Recast of the Local Law Regulatory Law, approved by Royal Legislative Decree 2/2004, of 5 March. "

Twenty-three. The single transitional provision of Law 18/2001 of 12 December, General for Budget Stability, is deleted and is not contained.

Additional disposition. It is not assumed by the State of obligations contracted by other administrations.

The State shall not assume or respond to the commitments of the Autonomous Communities, the Local Entities and the related or dependent entities, without prejudice to the mutual financial guarantees for the realization of the of specific projects.

First transient disposition. Transitional determination of the economic growth thresholds referred to in Article 7 of Law 18/2001 of 12 December 2001 General for Budgetary Stability.

One. In the three budgetary years after the entry into force of this Law, the rate of change in the real national gross domestic product which determines the economic growth threshold below which the State, the Communities Autonomous and the Local Entities of Article 19.1 of Law 18/2001, of December 12, General of Budget Stability, can present a deficit, it will be 2 percent of the national gross domestic product.

Two. Likewise, in the three budgetary years after the entry into force of this Law, the rate of change in the real national gross domestic product that determines the economic growth threshold above which the State, Autonomous Communities and the Local Entities of Article 19.1 of Law 18/2001, of December 12, General of Budget Stability, must present a surplus, it will be 3 percent of the national gross domestic product. Three. After the initial period referred to in the preceding paragraphs, or before that date if exceptional circumstances so advise, the variation rates shall be fixed in the form laid down in Article 7.3 of the Law. 18/2001, of 12 December, General of Budgetary Stability.

Second transient disposition. Scheme of the reorganisation plans approved before the entry into force of the Law.

One. The economic-financial plans for the consolidation of the Autonomous Communities or Local Entities of Article 19.1 of Law 18/2001 of December 12, General of Budget Stability, approved prior to the entry into force of this Law, will continue to be in force for the initial period for which they were approved.

In this case, the Autonomous Communities or Local Entities may present a deficit in the financial years for which, in view of the economic cycle situation, this is provided for or when it is intended to finance increases of investment in programmes intended to serve productive activities, in accordance with the terms set out in Articles 7 and 8 of Law 18/2001 of 12 December 2001 General for Budgetary Stability. The deficits authorised under these provisions are in addition to those provided for in the reorganisation plans which remain in force. Two. The monitoring of compliance and implementation of the economic and financial management plans referred to in the previous paragraph shall be carried out on the basis of the institutions which constituted their sector of public administrations in the the time they were approved.

Repeal provision. Regulation (EU)

All rules of the same or lower rank are repealed in that they contradict or oppose the provisions of this Law.

Final disposition first. Regulatory enablement.

The Government is authorized to, within one year of the entry into force of the Law, cover in a single text this Law and Law 18/2001 of December 12, General of Budget Stability, regularizing, clarifying and harmonizing the recast rules, as well as with the provisions of the Organic Law 5/2001, of 13 December, complementary to the General Law of Budgetary Stability, in the Law of Organic Law 3/2006 of Reformation of that Law, in Organic Law 8/1980, of 22 September, for the financing of the Autonomous Communities, in Law 47/2003 of 26 November, General Budget, and in the Recast Text of the Local Government Law Regulatory Law, approved by Royal Legislative Decree of 5 March.

Final disposition second. Basic character of the Law.

One. This Law, approved in accordance with the provisions of Articles 149.1.13 and 149.1.18. of the Constitution, constitutes basic legislation of the State, except as provided in paragraphs 9, 10, 11, 12, 13, 14 and 15 of its single article.

Two. Likewise, this law is approved under the jurisdiction that Articles 149.1.11. and 149.1.14. of the Constitution attribute exclusively to the State.

Final disposition third. Normative development of the Law.

1. The Council of Ministers is empowered in the field of its powers to dictate how many regulatory provisions are necessary for the implementation of this Law, and to agree on the measures necessary to ensure the effective implementation of this Law. implementation of the principles set out in this Law.

2. To make compliance with the principle of transparency effective, by Order of the Minister of Economy and Finance, prior to the report of the Council of Fiscal and Financial Policy of the Autonomous Communities in respect of which they will be affected, the data and documents which are the subject of periodic publication for general knowledge, the time limits for publication, and the manner in which they are published.

Final disposition fourth. Regulation of application of Law 18/2001 of 12 December, General of Budget Stability, to Local Entities.

Within six months of the entry into force of this Law, the Government will adopt a regulation implementing Law 18/2001, of December 12, General of Budget Stability, to the Local Entities, which addresses the details of its system of organization, operation and financial economic and, in particular, the provisions of the Recast Text of the Law of Local Government, approved by Royal Legislative Decree of 5 March.

Final disposition fifth. Entry into force of the Law.

One. This Law shall enter into force on 1 January of the year following the date of its publication in the 'Official Gazette of the State' and shall apply to the budgets for which it is to be drawn up from that date.

Two. However, the amendments introduced by this Law to Article 7 of Law 18/2001 of 12 December 2001, General for Budgetary Stability, which allow, by way of exception, the subjects covered by Articles 2.1.a) and (c) and 19.1 of the General Law on Budgetary Stability, to present a deficit when it is intended to finance investment increases in programs intended to serve productive activities, will be applicable from the entry into force of this Law.

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this law.

Madrid, 26 May 2006.

JOHN CARLOS R.

The President of the Government, JOSÉ LUIS RODRÍGUEZ ZAPATERO