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Act on the Joint Federal/Länder Task for the Improvement of Regional Economic Structures (GRW-Gesetz)

Long Title: Gesetz über die Gemeinschaftsaufgabe “Verbesserung der regionalen Wirtschaftsstruktur”

In the version of 6 October 1969 (Federal Law Gazette I p. 1861 ff., entry into force 1 January 1970), last amended by Article 269 of the Ordinance of 31 August 2015 (Federal Law Gazette I p. 1474 ff., entry into force 8 September 2015).

This translation was kindly provided by the Federal Ministry for Economic Affairs and Energy of the Federal Republic of Germany.

Disclaimer by the Federal Ministry: Translations of these materials into languages other than German are intended solely as a convenience to the non-German-reading public. Any discrepancies or differences that may arise in translations of the official German versions of these materials are not binding and have no legal effect for compliance or enforcement purposes. Please send comments with regard to this document to the following e-mail address: buero-iiib2@bmwi.bund.de.

This Act was adopted on 2 January 1970 as per Section 1 Subsection 1 No. 11 G 114-5 of 25 March 1974.


The Bundestag has adopted the following Act with the consent of the Bundesrat:

Section 1 Joint Task

(1) The following actions intended to improve the regional economic structure shall be undertaken as a joint task within the meaning of Article 91a Subsection 1 of the German Basic Law:

1. investment support for trade and industry as these establish, expand, convert or undertake fundamental rationalisation in commercial enterprises;

2. investment support for commerce-related infrastructure, to the extent that this is directly necessary for regional economic development;

3. non-investment measures and other programmes to strengthen the competitiveness of businesses, to support [the tackling of] structural problems with regional policies and to support regional activities, to the extent that these are directly necessary for regional economic development;

4. evaluation of the actions and associated research for regional policy purposes.

(2) The support measures listed in Subsection 1 shall be taken in areas with significant economic structural problems, particularly in areas where regional aid may be provided pursuant to Article 87(3) Treaty establishing the European Community. Support shall also be permissible for the benefit of areas that are threatened by structural change to the extent that negative impacts on a significant scale are foreseeable for those areas.

(3) Individual support measures shall also be possible outside the above areas, provided that there is a direct connection with support projects in neighbouring assisted areas.

Section 2 General Principles

(1) The support provided in the form of the measures as per Section 1 Subsection 1 must be provided in accordance with the principles of general economic policy and with the objectives and requirements of regional planning and land-use planning. The support should be focused in terms of geographical and thematic areas. It must be coordinated with other public-sector development projects.

(2) Pursuant to Section 1 Subsection 1 No. 1, commercial enterprises shall only receive support if it is reasonable to accept that they can compete successfully on the market. The contracting entities for the measures to expand infrastructure as per Section 1 Subsection 1 No. 2 shall preferably be municipalities and associations of municipalities; support shall not be provided for measures undertaken

1. by the Federation or the Länder, or

2. by natural and legal persons that are seeking to make profit.

(3) Section 2 Sentence 2 Half-sentence 2 No. 1 shall not apply to municipal tasks undertaken in the Länder of Berlin or Hamburg.

(4) Financial aid shall only be granted if the recipient makes an adequate contribution.

Section 3 Types of support

The financial support can come in the form of grants, loans, and guarantees.

Section 4 Joint coordination framework for the improvement of regional economic structures

(1) A joint coordination framework for the improvement of regional economic structures shall be established.

(2) The joint coordination framework must be designed in accordance with the applicable provisions established by the European Commission with regard to state-aid for the purposes of regional aid. It shall be subject to continuous development.

(3) The joint coordination framework shall notably include:

1. the designation of the assisted areas as per Section 1 Subsection 2 in accordance with an appropriate assessment process;

2. the [specification of] measures eligible for support as per Section 1 Subsection 1;

3. requirements for, type, and level of the support;

4. the appropriate distribution of federal funds among the Länder;

5. regulations with regard to the provision and recovery of funds between the Federation and the Länder;

6. reporting, evaluations, and statistical analyses.

Section 5 Coordination Committee

(1) The Federal Government and the Länder Governments shall form a coordination committee tasked with decisions relating to the joint coordination framework and adjustments of this as per Section 4 Subsections 2 and 3. It [The Coordination Committee] shall consist of the Federal Minister for Economic Affairs and Energy, who shall act as chair, the Federal Minister of Finance, and one minister (senator) from each of the Länder; every member shall be free to have themselves represented. The number of votes held by the Federation shall equal that of the number of all Länder. Each Land shall have one vote.

(2) The Coordination Committee shall take decision with the votes of the Federation and the majority of the votes of the Länder.

(3) The Coordination Committee shall adopt its Code of Procedure.

Section 6 Implementation and information

(1) The implementation of the measures undertaken under the joint coordination framework shall fall within the remit of the Länder.

(2) The Länder governments shall inform the Federal Government and the Bundesrat at their request about the implementation of measures undertaken under the joint coordination framework and about the general state of the joint task.

(3) The chair of the Coordination Committee shall inform the German Bundestag about the implementation of the joint coordination framework and about the general state of the joint task.

Section 7 Financing

(1) Subject to the provision of Article 91a Subsection 3 German Basic Law, the Federation shall bear half of the spending for each Land.

(2) The details of the payment procedure shall be specified by the Coordination Committee in line with the federal budgetary rules and laid down in the joint coordination framework.

(3) It shall be possible to use funding from the European Structural Funds for measures pursuant to Section 1 Subsection 1.

(4) The Länder shall be free to provide additional funds from their own budget in line with the provisions set out in the joint coordination framework.

Section 8 Repayment of and interest rates to be applied to federal funds

(1) A share of any sum paid by the beneficiary for the repayment of a loan and its interest, or in compensation for payment defaults resulting from a guarantee, shall be payable by the Land to the Federation.

(2) The Federation is free to recover federal funds attributed to a Land if that Land is failing, wholly or in part, to comply with the specified requirements.

(3) In the case of non-compliance with the requirements by a beneficiary, the Land shall recover the equivalent of the federal share of the funds and restore the recovered sums, including interest, to the Federation.

(4) The Land shall apply an interest rate of 3.5 percentage points above the base rate as per Section 247 Civil Code to all sums payable to the Federation as per the Subsections above; this shall apply from the date of payment of the federal funds for cases as per Subsection 2 and from the 31st day after receipt of payment by the Land for cases as per Subsections 1 and 3.

Sections 12 and 13 (no longer applicable)

Section 14 Entry into force

This Act shall enter into force on 1 January 1970.

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