Financial assistance for investments

- Constitution of Germany

Article 104b[Financial assistance for investments]

(1) To the extent that this Basic Law confers on it the power to legislate, the Federation may grant the Länder financial assistance for particularly important investments by the Länder and municipalities (associations of municipalities) which are necessary to:

1. avert a disturbance of the overall economic equilibrium,

2. equalise differing economic capacities within the federal territory, or

3. promote economic growth. By way of derogation from the first sentence, the Federation may grant financial assistance even outside its field of legislative powers in cases of natural disasters or exceptional emergency situations beyond governmental control and substantially harmful to the state’s financial capacity.

(2) Details, especially with respect to the kinds of investments to be promoted, shall be regulated by a federal law requiring the consent of the Bundesrat or by an executive agreement based on the Federal Budget Act. The federal law or executive agreement may contain provisions on the shaping of the respective Land programmes for the use of the financial assistance. The criteria for the shaping of the Land programmes shall be specified in agreement with the affected Länder. To ensure that the funds are used for their intended purpose, the Federal Government may require the submission of reports and documents and conduct surveys of any authorities. The funds from the Federation shall be provided in addition to funds belonging to the Länder. The duration of the grants shall be limited, and the grants must be reviewed at regular intervals with respect to the manner in which they are used. The financial assistance must be designed with descending annual contributions.

(3) Upon request, the Bundestag, the Federal Government and the Bundesrat shall be informed about the implementation of such measures and the improvements reached.