Royal Decree-Law 4/2013 of 22 February on measures to support entrepreneurs, stimulate growth and create employment (“RDL 4/2013”) was published in the Official Gazette of Spain on 23 February 2013. Several explanatory notes on RDL 4/2013 and the administrative agreement dated 25 March 2013 for the extension of terms for contractors and local entities have been published on www.minhap.gob.es.
RDL 4/2013 extends the subjective and objective scope of the financing measures for payments to suppliers of local authorities and autonomous communities, which first stage was established by Royal Decree-Law 4/2012 of 24 February (“RDL 4/2012”), Royal Decree-Law 7/2012 of 9 March (“RDL 7/2012”) and the Agreement of the Fiscal and Financial Policy Council of 6 March 2012 (“ACPFF”). These regulations will govern the RD-L 4/2013 procedures on a supplementary basis.
The following is a summary of the main novelties of RDL 4/2013 in Q&A form.
1. Which public authorities may participate in this new stage of the financing measures for payments to suppliers?
The financing measures for payments to suppliers and other contractors established in RDL 4/2013 applies:
a) To all autonomous communities;
b) Expressly, to intermunicipal associations (in Spanish mancomunidades de municipios); and
c) To local authorities to which the models for participation in State taxes apply.
In the case of local authorities in the Basque Country and Navarra, the previous signing of an agreement between the General State Administration and the provincial councils of the Basque Country and the Provincial Community of Navarra will be required, respectively.
2. Does RDL 4/2013 exclude entities over which those administrations have decision-making powers?
The RDL 4/2013 only includes authorities and entities over which the autonomous community governments have decision-making powers over their management and their internal rules and by-laws and partner entities in which such governments participate, directly or indirectly.
All these authorities and entities must form part of the Public Administration, within the autonomous communities’ subsector, as defined in the European System of National and Regional Accounts adopted by Council Regulation (EC) 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community.
3. Who may benefit from this new stage of the measures for payments to suppliers?
The following may benefit from the new stage:
a) Those that have, with local authorities to which the models for participation in State taxes apply:
(i) Outstanding payment obligations that have been applied to the entity’s budget relating to fiscal years prior to 2012; and
(ii) Arising from:
- Collaboration agreements;
- Administrative concessions;
- Outsourcing of management, in which the outsourcer is considered an instrument and technical service of the State or autonomous administration, and is not an autonomous community itself, according to RDL 4/2013.
- Real estate lease contracts;
- Agreements falling under the scope of Law 31/2007 of 30 October on contracting procedures in the water, energy, transport and postal services sector;
- Public works concession contracts;
- Public-private partnerships; and
- Public services management agreements, such as a concession, corresponding to the subsidy that has been agreed to be assumed by the autonomous community or local authority, insofar as the amount owed to the contractor was due and payable before 1 January 2012.
b) Those that have with intermunicipal associations or with local authorities from the Basque Country and Navarra:
(i) Outstanding Payment obligations that are due and payable and that relate to the annual accounts of the corresponding entity for fiscal years prior to 2012; and
(ii) Arising from:
- agreements under a)(ii); and
- works, services, or supply contracts falling under the scope of Law 3/2011 of 14 November on public sector procurement which invoice, corrective invoice, or equivalent payment request was received in the administrative registry of the local authority before 1 January 2012.
c) Those that have, with autonomous communities:
(i) Outstanding payment obligations included in the general accounts of the autonomous community in fiscal year 2011 and prior fiscal years, or in annual accounts already approved, corresponding to such fiscal years (and in all cases, the obligation should have been applied to the budget prior to the payment of the debt); and
(ii) Arising from agreements under section a)(ii).
4. Can suppliers that did not benefit from the measures for payments to suppliers in the first stage benefit from it at a later stage?
RDL 4/2013 establishes the possibility of paying suppliers with outstanding invoices payable by public authorities that did not participate in the first stage of the financing measures (regulated by RDL 4/2012, RDL 7/2012 and ACPFF).
This provision applies to:
a) Local authorities in the Basque Country and Navarra;
b) Intermunicipal associations; and
c) Autonomous communities that did not participate in the extraordinary measure under the terms of the ACPFF (Navarra, the Basque Country and Galicia).
Contractors of autonomous communities and local authorities included in the initial listings of the first stage of the measure for payments may also benefit from this provision even if they did not express their acceptance then.
5. What do contractors of local authorities need to do to benefit from the second stage of the measures for payments to suppliers?
Until 1 April 2013, contractors could request an individual certificate of the existence of outstanding payment obligations from a local authority to be issued by submitting the model form provided in Order HAP/537/2012 of 9 March (published in the Official Gazette of Spain on 16 March). Submitting the request will imply tacit agreement of the supplier’s payment conditions.
The certificate, which must indicate that the obligation was applied to the authority’s annual accounts prior to fiscal year 2012, will be issued within five calendar days of the request. The lack of a response will be considered as tacit rejection.
Before 5 April 2013, the local authorities will submit to the Treasury and Public Administrations Ministry (TPAM) a certified list of the requests of individual certificates that have been issued as of that time. Contractors may confirm their inclusion in the certified list.
6. How about contractors of autonomous communities?
From 6 to 22 March 2013, suppliers may confirm their inclusion in the list prepared by the autonomous communities. If suppliers are:
a) included in the list, they may accept the measures for payment in person or electronically; or
b) not included in the list, they may request the corresponding autonomous community to issue an individual certificate recognising the existence of outstanding payment obligations.
The certificate will be issued within five calendar days, with a deadline of on or before 29 March 2013. The lack of a response will be considered as tacit rejection.
Before 29 March 2013, the autonomous communities must submit to the TPAM a complete certified list of invoices already accepted by suppliers.
7. Do the same provisions apply to suppliers that did not participate in the first stage of the measures for payments to suppliers?
Suppliers that were included in the initial listings of the first stage of the measures for payments but did not expressly accept those provisions may request an individual certificate from the autonomous community or the local authority.
Suppliers that requested but were denied a certificate during the first stage may request a new certificate if the outstanding payment obligation complies with the requirements indicated in question 3.
8. How and when does the debt collection become effective at this new stage of the measures?
The suppliers will receive the transfer of the funds within the first two weeks of June 2013 following the TPAM’s evaluation of the Adjustment Plan (or its revision) of the authorities participating in the second stage and the formalisation of the appropriate credit transactions.
The transfer will be made to the bank accounts indicated by the contractor when accepting the application of the procedure or, in specific cases, when submitting the request for the individual certificate of the existence of outstanding payment obligations. As such, no recourse need be made to any credit entity.
9. Do debts owed by intercommunity associations need to have particular characteristics?
Yes. In order for contractors to exercise their right to collect payments:
a) The intermunicipal associations must send an authenticated copy of the contractor’s by-laws to the TPAM before 1 April 2013; and
b) The intermunicipal associations must be included in the General Database of Local Authorities and the List of Public Local Sector Authorities. Otherwise, they must request their inclusion and submit their by-laws prior to the deadline indicated above.
c) Likewise, before this deadline, the intermunicipal associations must inform TPAM of each municipality’s membership share in that community as at 31 December 2011.