A state fund is created to pay overdue bills to suppliers

Automatic summary, not yet reviewed

1. The Fund for the Financing of Payments to Suppliers (Fondo para la Financiación de los Pagos a Proveedores) is created, a public entity with its own legal personality, attached to the Ministry of Economy and Competitiveness, which will directly pay the outstanding debts of local entities and Autonomous Communities to their suppliers.
2. The Fund is endowed with up to 6,000,000 thousand euros from the General State Budgets, of which 1,500,000 thousand euros will be payable in 2012. It may also raise money in the capital markets, and its debts carry a State guarantee that is explicit, irrevocable, unconditional and direct.
3. The Fund is run by a Governing Council made up of representatives of several State Secretariats. The Official Credit Institute acts as paying agent, and the General Intervention of the State Administration audits the Fund.
4. The Fund pays suppliers directly and takes over their right to collect from the debtor administration. The transactions of local entities are secured through the withholding of their share of State revenues, which is transferred to the Fund.
5. Local entities that join the mechanism must submit reports on the implementation of their adjustment plans, annually or quarterly depending on the case, and may be subject to control actions to guarantee repayment.
6. The mechanism does not apply to local entities in the Basque Country and Navarre because of their foral regime, and the Council of Ministers may order the winding up and liquidation of the Fund. The rule takes effect the day after its publication in the Official State Gazette.

Who it affects

• Suppliers of territorial administrations, especially small and medium-sized businesses, who will be paid directly by the Fund.: They collect their outstanding debts.
• Local entities that join the mechanism, which will receive financing in exchange for withholdings on their share of State revenues and for submitting adjustment plans.: Financing with conditions and controls.
• Autonomous Communities that choose to join the extraordinary financing mechanism.: Financing to pay suppliers.
• Local entities in the Basque Country and Navarre, excluded from the mechanism because of their foral regime.: They are left out of the mechanism.

Words worth knowing

Subrogarse (subrogation)

To step into another person's or entity's place to exercise the same rights. Here, the Fund takes the supplier's place and later collects from the debtor administration.

Plan de ajuste (adjustment plan)

A plan by an administration to cut spending and balance its accounts.

Entidad de Derecho público (public law entity)

A body created by the State with its own legal personality, meaning it can act, contract and borrow in its own name.

Intervención General de la Administración del Estado (General Intervention of the State Administration)

The public body that controls and audits the accounts and spending of the Administration.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries