State Contributions Act (SBG) - Scope of Regulation and Application (SBG)

1. This law governs the allocation of contributions by the canton ("state contributions"). Federal or inter-cantonal regulations remain reserved.

2. It applies to the canton as well as to the recipients of state contributions.

3. It does not apply to contributions from the Swisslos Fund or the Swisslos Sports Fund.

1. This Act aims to ensure that state contributions

a. achieve their purpose in an economical and effective manner;

b. are aligned and reviewed according to uniform principles;

c. are coordinated with the financial capabilities and strategic priorities of the canton.

1. State contributions are provided as compensation or financial assistance.

2. They are granted for operations ("operational contributions") or for investments ("investment contributions") and are typically rendered without an obligation for repayment.

3. They are assured in the form of a written public law contract ("performance agreement") or in the form of an administrative decision.

1. A "compensation" is a contribution intended to offset the financial burdens incurred by third parties from the transfer of cantonal responsibilities.

1. The provision of a compensation requires that the conditions according to § 23 of the Government and Administration Organization Act of September 28, 2017, are fulfilled.

1. A "financial aid" is a contribution intended to promote or maintain an activity carried out voluntarily by third parties that serves the public interest.

2. Financial aid should, if possible, be provided as seed funding.

1. The grant of financial assistance is subject to the following conditions

a. there is a public interest in the performance provided;

b. the performance cannot be adequately provided without the financial assistance;

c. the applicants make a reasonable personal contribution and seek and utilize further funding opportunities;

d. the applicants ensure an appropriate and cost-efficient delivery of the performance.

2. The grant of financial assistance may be subject to conditions.

3. There is no legal entitlement to financial assistance. Other statutory provisions remain reserved.

1. The preparation for the allocation of compensations is conducted in an informal procedure.

2. The allocation of financial aid only takes place upon a prior application.

3. Anyone who requests multiple financial aids for the same project must inform all approached administrative offices of the canton and the municipalities of their own accord and without delay.

1. The administrative offices of the canton responsible for the substantive transaction ("administrative offices") shall investigate the financial, structural, and organizational circumstances of potential recipients of state contributions prior to the disbursement of such contributions.

2. The scope of the investigation shall be commensurate with the amount of the contribution.

3. The canton may commission individual investigations to be conducted by external entities.

1. Potential recipients of state contributions are required to provide all necessary information to the administrative offices or external agencies.

2. They must grant them targeted access to the operations, financial circumstances, as well as all available and relevant documents and records.

1. For the assessment of state contributions, only expenditures that are necessary for the proper and cost-effective fulfillment of the assigned or supported task are eligible.

2. Cost-effective fulfillment particularly includes

a. a realistic assessment of costs and revenues;

b. the exclusion of inappropriate profits;

c. the exclusion of cross-financing other activities;

d. the exploitation of cost reduction potentials.

3. It is to be reviewed by the administrative units using benchmarks or other suitable instruments, provided this is proportionate.

1. Service agreements and provisions regarding operating contributions are valid for a maximum of 4 years.

2. Agreement or provision regulations that provide for an implicit extension of the duration are not permissible.

3. Operating contributions can be renewed after their expiration. Intended renewals must be prepared in a timely manner.

1. For an operational subsidy, at most only those costs are credited that the canton reimburses for a comparable activity or that are customary in the industry.

2. Expenditures for depreciation

a. are only creditable to the extent required by law or customary in the industry;

b. on investments are not creditable if they have been financed with non-repayable contributions from the state or third parties.

1. Operating Contributions are Not Indexed.

1. The project may only commence once the investment contribution has been legally agreed or issued.

2. As a rule, no investment contributions are granted for projects for which an investment contribution is applied for only after the commencement of implementation.

3. A significant change to the project results in a corresponding adjustment to the performance agreement or the issuance.

1. **Recipients of State Contributions Have the Following Obligations:**

a. Maintaining accounts in accordance with commercial principles;

b. Adhering to statutory audit obligations, unless more extensive duties are agreed upon or stipulated;

c. Maintaining adequate performance monitoring;

d. Communicating their receipt of state contributions externally.

2. They shall voluntarily submit operationally relevant documents to the canton, including, but not limited to, the business reports, the annual financial statements, the audit reports, and the documents related to performance monitoring, as well as, where applicable for ordinary audits, the certificates of the Internal Control System (ICS).

3. For state contributions exceeding CHF 5 million per year, they shall report to the canton on ensuring compliance with legal regulations (Compliance).

4. They shall notify the canton without delay, particularly when

a. Their ability to provide services is at risk;

b. Their annual financial statements are rejected by the competent body;

c. Members of the board of directors or supervisory board are removed or members of the executive management are dismissed.

5. They shall comply with the cantonal laws on public procurement of their location.

1. Operating contributions must not lead to unreasonable profits.

2. The government council shall specify in the regulation

a. the amount of annual state contributions, beyond which profits based on operating contributions must be disclosed separately as reserves;

b. the ceiling for reserves and the corrective actions in case of their exceedance.

1. The canton shall verify at least once during the term of the service agreement or order whether the service or task tied to the operational contribution has been provided or fulfilled in accordance with the agreement or order.

2. It shall verify the operational contributions upon each renewal of the agreement or order concerning their necessity, effectiveness, efficiency, and affordability.

3. Sections 9 paragraph 3 and 10 apply mutatis mutandis.

1. The canton orders the revocation of the service agreement or the decree concerning a state contribution if it was concluded or issued in violation of legal provisions or based on incorrect or incomplete facts.

2. It also orders the complete or partial repayment of the disbursed state contribution.

3. It may waive the revocation of compensation if

a. the legal violation was not easily recognizable by the recipient of the compensation;

b. the recipient of the compensation has taken measures based on the service agreement or the decree that cannot be reversed without unreasonable financial losses;

c. the incorrect or incomplete determination of facts is not due to intentional or grossly negligent behavior.

1. If a recipient of a state contribution does not fulfill the performance agreement or decree, or does so inadequately, the canton shall order the complete or partial suspension of further payment of the state contribution, as well as, if applicable, its complete or partial repayment.

1. Recipients of a state grant must promptly inform the canton of any misappropriations or sales of grant-supported objects.

2. If a funded object, particularly a property, building, work, or movable asset, is misappropriated or sold, the canton orders the proportional repayment of the contributions made.

3. The extent of the repayment is determined by the ratio between the intended and the actual period of use.

4. The canton may partially or entirely waive the repayment obligation upon sales if the purchaser of the sold item meets the requirements for the state grant and assumes all contractual obligations.

1. State contributions to be repaid shall be subject to interest at the default interest rate specified in the Swiss Code of Obligations from the date of a legally binding repayment decision.

2. In cases of hardship, the canton may waive the repayment obligation pursuant to §§ 19-21.

1. Claims arising from state contribution relationships become time-barred after 5 years from their due date.

2. The obligation to repay becomes time-barred 5 years after the canton becomes aware of the reason for repayment, but in any case, 10 years after the obligation arises.

3. If the obligation to repay derives from a criminal act for which criminal law prescribes a longer statute of limitations, that statute shall apply.

1. The limitation period does not begin or is suspended

a. during an administrative procedure;

b. as long as the claim is not due;

c. as long as the liable person cannot be pursued in Switzerland.

2. The limitation period is interrupted and starts anew

a. with every payment request;

b. with any acknowledgment of the claim for state contributions;

c. with the initiation of criminal proceedings.

1. A fine of up to CHF 50,000 will be imposed on anyone who

a. provides false or incomplete information about material facts to obtain a state subsidy;

b. conceals material facts in connection with state subsidies;

c. fails to comply with the reporting obligation pursuant to § 16 paragraph 4;

d. does not use state subsidies for their intended purpose.

2. Incitement and complicity are punishable. Negligence is not punishable.

3. The authority responsible for imposing the fine is the Government Council.

1. Applications for financial assistance submitted under previous law are to be processed according to that law.

2. Legal relationships established before the enactment of this law, which pertain to compensations or financial assistance as defined by this law, shall remain unchanged for a maximum of 4 years after the enactment of this law, unless they terminate earlier.

3. Paragraph 2 does not apply to cases based on an international treaty.