The Interterritorial Compensation Fund is a Spanish public fund, created under the General Budget of the State, which acts in order to correct interterritorial economic imbalances and make the principle of solidarity effective. It is intended to finance investments in comparatively less developed territories to promote the creation of income and wealth in those territories. These resources will be distributed by the Cortes Generales among the beneficiary autonomous communities.
Its regulation is contained in the Spanish Constitution itself (art. 158.2) and in Law 22/2001, of December 27, regulating Interterritorial Compensation Funds.
Operation
Article 2 of the Constitution recognizes and guarantees the right to autonomy of the different nationalities and regions and solidarity between all of them.
To make this principle of solidarity effective, Organic Law 8/1980, of September 22, on Financing of the Autonomous Communities (LOFCA) included in its article 16 the general principles of the Interterritorial Compensation Fund (FCI), as well as the basic rules that govern said Fund, establishing that it will be an ordinary Law that contains its specific regulations.
Law 22/2001, of December 27, regulating the Interterritorial Compensation Funds, which currently regulates it, was promulgated to collect two recommendations of the Fiscal and Financial Policy Council of July 27, 2001 on the Interterritorial Compensation Fund:.
Territorial scope of the Fund:.
The General State Budget Law specifies which Communities will be beneficiaries of the Fund based on their lower development, that is, those whose per capita income is less than 75 percent of the community average; and that coincide with those included by the European Union within the beneficiary regions of the Objective 1 Structural Funds of the 2000-2006 programming period.
The Compensation Fund and the Complementary Fund are intended to finance investment expenses in comparatively less developed territories that directly or indirectly promote the creation of income and wealth in the beneficiary territory. Specifically, the Complementary Fund, at the request of its beneficiary territories, may be used to finance expenses necessary to launch or operate the investments financed from the Compensation Fund or this Fund, for a maximum period of two years. In this regard, the counting of years will begin at the moment in which the execution of the project has been completed.
Interterritorial management
Introduction
The Interterritorial Compensation Fund is a Spanish public fund, created under the General Budget of the State, which acts in order to correct interterritorial economic imbalances and make the principle of solidarity effective. It is intended to finance investments in comparatively less developed territories to promote the creation of income and wealth in those territories. These resources will be distributed by the Cortes Generales among the beneficiary autonomous communities.
Its regulation is contained in the Spanish Constitution itself (art. 158.2) and in Law 22/2001, of December 27, regulating Interterritorial Compensation Funds.
Operation
Article 2 of the Constitution recognizes and guarantees the right to autonomy of the different nationalities and regions and solidarity between all of them.
To make this principle of solidarity effective, Organic Law 8/1980, of September 22, on Financing of the Autonomous Communities (LOFCA) included in its article 16 the general principles of the Interterritorial Compensation Fund (FCI), as well as the basic rules that govern said Fund, establishing that it will be an ordinary Law that contains its specific regulations.
Law 22/2001, of December 27, regulating the Interterritorial Compensation Funds, which currently regulates it, was promulgated to collect two recommendations of the Fiscal and Financial Policy Council of July 27, 2001 on the Interterritorial Compensation Fund:.
Territorial scope of the Fund:.
The General State Budget Law specifies which Communities will be beneficiaries of the Fund based on their lower development, that is, those whose per capita income is less than 75 percent of the community average; and that coincide with those included by the European Union within the beneficiary regions of the Objective 1 Structural Funds of the 2000-2006 programming period.
The Compensation Fund and the Complementary Fund are intended to finance investment expenses in comparatively less developed territories that directly or indirectly promote the creation of income and wealth in the beneficiary territory. Specifically, the Complementary Fund, at the request of its beneficiary territories, may be used to finance expenses necessary to launch or operate the investments financed from the Compensation Fund or this Fund, for a maximum period of two years. In this regard, the counting of years will begin at the moment in which the execution of the project has been completed.
Currently, the beneficiary Communities are Andalusia, Galicia, Castilla y León, Extremadura, Castilla-La Mancha, Valencian Community, Canary Islands, the Principality of Asturias, the Region of Murcia, Cantabria and the Cities with Statute of Autonomy of Ceuta and Melilla, in accordance with the sole additional provision of Law 22/2001, of December 27.[3].
Amount of Funds:.
The Compensation Fund may not be less than 22.5 percent of the calculation base constituted by public investment, meaning, for these purposes, all the expenses for the year included in the Budgets of the State and its Autonomous Bodies, corresponding to real new investments of a civil nature.
The Complementary Fund will be provided annually for each autonomous community and city with its own Statute of Autonomy, with an amount equivalent to 33.33 percent of its respective Compensation Fund.
Fund distribution criteria:.
The Compensation Fund is distributed in accordance with the provisions of article 4 of Law 22/2001, regulating Compensation Funds, and is distributed among the receiving autonomous communities on the basis of criteria or variables established in article 16 of the LOFCA, although it is Law 22/2001 that proceeds to its weighting, granting greater relative weight to the relative legal population variable of each Community in relation to that of the all of the Communities benefiting from the Fund (87.5 percent). The other variables are the migratory balance of each Community in the last ten years (1.6 percent), the ratio between the number of unemployed and the number of active people in each Community (1 percent), the surface area of each Community (3 percent), and the number of singular Entities per square kilometer of each Community (6.9 percent).
Once the distribution of the Compensation Fund has been carried out with the criteria and weightings established in the Law, the result obtained is corrected based on the inverse of the income per inhabitant of each territory and the island fact.
In the case of Cities with Statute of Autonomy of Ceuta and Melilla, their financing is carried out according to section 1.b) of article 2 and article 6 of Law 22/2001.
Currently, the beneficiary Communities are Andalusia, Galicia, Castilla y León, Extremadura, Castilla-La Mancha, Valencian Community, Canary Islands, the Principality of Asturias, the Region of Murcia, Cantabria and the Cities with Statute of Autonomy of Ceuta and Melilla, in accordance with the sole additional provision of Law 22/2001, of December 27.[3].
Amount of Funds:.
The Compensation Fund may not be less than 22.5 percent of the calculation base constituted by public investment, meaning, for these purposes, all the expenses for the year included in the Budgets of the State and its Autonomous Bodies, corresponding to real new investments of a civil nature.
The Complementary Fund will be provided annually for each autonomous community and city with its own Statute of Autonomy, with an amount equivalent to 33.33 percent of its respective Compensation Fund.
Fund distribution criteria:.
The Compensation Fund is distributed in accordance with the provisions of article 4 of Law 22/2001, regulating Compensation Funds, and is distributed among the receiving autonomous communities on the basis of criteria or variables established in article 16 of the LOFCA, although it is Law 22/2001 that proceeds to its weighting, granting greater relative weight to the relative legal population variable of each Community in relation to that of the all of the Communities benefiting from the Fund (87.5 percent). The other variables are the migratory balance of each Community in the last ten years (1.6 percent), the ratio between the number of unemployed and the number of active people in each Community (1 percent), the surface area of each Community (3 percent), and the number of singular Entities per square kilometer of each Community (6.9 percent).
Once the distribution of the Compensation Fund has been carried out with the criteria and weightings established in the Law, the result obtained is corrected based on the inverse of the income per inhabitant of each territory and the island fact.
In the case of Cities with Statute of Autonomy of Ceuta and Melilla, their financing is carried out according to section 1.b) of article 2 and article 6 of Law 22/2001.