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What it is

Help for local governments to pay debts to companies and self-employed workers

BOE step 7 of 7 · Passed

It is a royal decree-law. It was introduced on 24 April 2009. Introduced by: Gobierno.

Official title: Royal Decree-Law 5/2009, of 24 April, on extraordinary and urgent measures to facilitate the settlement of pending debts with companies and self-employed workers by local entities.

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Source: Congreso de los Diputados, file 130/000014· updated 11 Nov

Automatic summary, not yet reviewed

  1. Local governments with unpaid debts can take out a special bank loan to pay them off. The loan cannot last more than six years, and the money must be used to pay companies and self-employed workers within one month at the latest.
  2. To get the loan, the local government must approve a debt-reduction plan with its expected income and spending, and the full council must approve it with a favorable report from its audit office. The operation only needs to be reported to the Ministry of Economy and Finance within one month; otherwise the decision is void and the loan is automatically canceled.
  3. While the plan is in force, if the local government again ends up with a negative treasury balance, it cannot make new investments funded by loans. Compliance with the plan is reviewed every year, and the information is sent electronically.
  4. If a company or self-employed worker endorses invoices against a local government and the Instituto de Crédito Oficial guarantees those operations, the Ministry can withhold money the local government is due from its share of State taxes if it fails to repay. These guarantees cannot exceed 25 percent of what each local government is due in 2009, and the State is not liable for local governments' debts.

Who it affects

  • Local governments with unpaid debts: They can take out a special bank loan if they approve a debt-reduction plan and pay their creditors within one month.
  • Small and medium-sized companies working for local governments: They will get paid sooner and can use ICO guarantees to obtain liquidity.
  • Self-employed workers serving local governments: They will get paid sooner and can use ICO guarantees to obtain liquidity.
  • Ministry of Economy and Finance and Autonomous Communities: They receive information on the operations and can withhold payments to local governments that do not repay the ICO.

Words worth knowing

Entidad local (local government)
A town council, provincial council or other local public administration in Spain.
Remanente de tesorería para gastos generales negativo (negative general treasury balance)
A situation where the local government owes more than the money it has to pay it.
Plan de saneamiento (debt-reduction plan)
A plan with the income and spending the local government commits to in order to pay its debts.
Pleno (full council)
The body made up of all council members that makes the main decisions of a town council.
Instituto de Crédito Oficial (ICO)
Spanish public bank that can issue guarantees of payment (avales).

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

Where it stands

How far did it get?

It took 7 of 7 steps. It reached BOE, and today it is passed.

  1. Introduced24 April 2009Someone registers the text in the Congreso.
  2. Admitted28 April 2009The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendmentsno dateGroups propose changes.
  4. Committeeno dateA committee goes through the text in detail.
  5. Plenary28 April 2009All 350 deputies vote.
  6. Senateno dateThe Senate can pass it, amend it or veto it.
  7. BOEno dateIt is published in the Official State Gazette (BOE) and comes into force.
See the 4 official steps on a timeline
Apr 200911. 24 April 2009: Presentación22. 28 April 2009: Calificación33. 28 April 2009: Pleno Convalidación desde 28/04/2009 hasta 21/05/200944. 21 May 2009: Concluido - (Convalidado) desde 21/05/2009 hasta 28/05/2009

Was there a plenary vote?

We have no plenary vote linked to this law in the Congreso’s data.

What happens next

What happens now?

It is law, or will be once published in the BOE. It comes into force on the date its own text sets.

Published in the BOE: Royal Decree-Law 5/2009, of April 24, on extraordinary and urgent measures to facilitate the settlement of pending debts with companies and self-employed workers by Local Entities.

Sources

Where does all this come from?

  • The data comes from the open files of the Congreso, the Senate and the BOE, unaltered.
  • Each deputy’s province is the one of their seat on the day of the vote.
  • We only say “passed” or “rejected” when the majority needed is certain; otherwise we say which side had more votes.

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