Help for public administrations and town councils to pay supplier debts

Automatic summary, not yet reviewed

1. A third and final phase of the supplier payment financing mechanism is launched, allowing cancellation of debts that were due, liquid and enforceable before May 31, 2013.
2. The scope of debts that can be included is expanded: for the first time, debts of public universities, expropriation compensation recognized by a final court ruling, certain transfers to local entities and to non-profit institutions, among others, are covered.
3. Creditors of suppliers can check on the Tax Agency's website whether their debtors will be paid through this mechanism and when the final list of invoices to be paid will be sent.
4. When the administration pays the supplier, the debt is fully extinguished, including interest, court costs and other expenses. the Instituto de Crédito Oficial manages payments as the Fund's paying agent.
5. Municipalities with financial problems can request extraordinary liquidity measures: advances on their share of State taxes, installment payment over ten years of debts with the Tax Agency or Social Security, or converting short-term debt into long-term debt.
6. Those using these measures must comply with an adjustment plan with conditions such as reducing operating expenses or funding services through fees and public prices. If they fail to comply, the aid is canceled.

Who it affects

• Autonomous Communities (Comunidades Autónomas): They can request inclusion of their supplier debts in the new phase and must submit or revise an adjustment plan.
• Local entities (municipalities, associations of municipalities and consortia): They can include their pending invoices in the supplier payment mechanism and, if they meet requirements, request liquidity measures.
• Suppliers of public administrations: They can check the invoice list and accept payment of their debt through the mechanism.
• Creditors of those suppliers: They can check on the Tax Agency's website whether and when they will be paid.
• Public universities: Their supplier debts can be included for the first time, with limits and, if exceeded, through an adjustment plan agreed with the Autonomous Community.

Words worth knowing

Deuda líquida, vencida y exigible (due, liquid and enforceable debt)

A debt whose amount is clear, whose payment deadline has passed and which can be claimed now.

Plan de ajuste (adjustment plan)

A set of spending cuts and controls the administration commits to in order to receive the aid.

Remanente de tesorería (treasury balance)

What the municipality has left (or owes) when the year's accounts close, after deducting pending commitments.

Participación en tributos del Estado (share of State taxes)

Money the State regularly gives to municipalities by law; it can be withheld to collect debts.

Fraccionamiento (installment payment)

Allowing a debt to be paid in several installments instead of all at once.

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