Act on the Financial Equalisation of Parishes (FIAG KG) - Scope of Application

1. This law governs the financial equalization of parish communities as well as their cantonal organizations.

2. It specifically regulates

a) the financing;

b) the entitlement of each denomination as well as the allocation of funds within each denomination;

c) the resource equalization by the resource-rich parish communities and the canton in favor of the resource-poor parish communities;

d) the use of the share of the cantonal organizations.

1. The Financial Equalization Shall

a) Support all church congregations according to the number of their denomination members;

b) Relieve resource-poor church congregations through a resource equalization;

c) Reduce the differences in financial capability and tax burden between the church congregations;

d) Provide the cantonal organizations with means to fulfill social regional and social cantonal tasks as well as to further support their church congregations.

1. This law is guided by the following principles in regulating financial equalization

a) efficient and economical fulfillment of tasks;

b) transparency in the provision of societal regional and societal cantonal tasks;

c) promotion of inter-municipal cooperation.

1. The financial equalization of the church congregations is subject to paragraphs 2 to 5, with an annual amount of 10 million Swiss Francs available.

2. The Cantonal Council establishes annually in the year of the publication of the performance report according to § 20 the annual amount available to the financial equalization of the church congregations according to paragraph 1 for the following six years. The newly established annual amount must not exceed 10 million Swiss Francs. The re-determination is based on a report to be prepared by the department concerning the church congregation finances of the past six years, as well as the performance report.

3. The annual amount of 10 million Swiss Francs or the newly determined annual amount according to paragraph 2 is periodically indexed. The indexation is determined by the national consumer price index. In the event of a re-determination of the annual amount according to paragraph 2, any indexation already effected will also be taken into account. The government council regulates further details by decree.

4. The periodically indexed annual amount according to paragraphs 1 to 3 constitutes, subject to paragraph 5, the total annual distribution amount.

5. If the revenue from the financial equalization tax of a year exceeds the total distribution amount according to paragraph 4, then the revenue from the financial equalization tax, but not exceeding the indexed annual amount of 10 million Swiss Francs, is considered the total distribution amount for the respective year.

1. The financing shall be drawn from the proceeds of the fiscal equalization tax pursuant to § 109 of the Law on State and Municipal Taxes (Tax Law) of December 1, 1985, as well as, if necessary, from the general funds of the canton.

2. If the proceeds from the fiscal equalization tax in any given year exceed the total distribution amount, the portion of the proceeds exceeding the total distribution amount shall be allocated to the Church Municipalities Fiscal Equalization Fund.

3. If the proceeds from the fiscal equalization tax are lower than the total distribution amount, the shortfall in relation to the total distribution amount shall be covered by the Church Municipalities Fiscal Equalization Fund.

4. If the fund balance of the Church Municipalities Fiscal Equalization Fund is insufficient to cover the shortfall on the total distribution amount according to paragraph 3, the difference is to be financed by the canton and transferred to the Church Municipalities Fiscal Equalization Fund.

1. The administrative costs pursuant to § 29 shall be deducted in advance from the total distribution amount.

2. The remaining amount shall be allocated to the individual denominations according to the number of members of each denomination in each district.

3. The sum of the shares from all districts constitutes the total entitlement of a denomination.

1. From the total claim of a denomination, after deducting the costs resulting for the respective denomination as per § 21, a percentage ranging from 40 to 60 percent is allocated to the parishes of that denomination. The difference to this percentage up to 100 percent of the total claim of a denomination is allocated to the cantonal organization of the respective denomination.

2. The government council determines a uniform percentage for the basic distribution for all denominations each year in which the performance report is published, according to § 20, for the following six years. The cantonal organizations must be consulted beforehand.

1. A percentage within a range of 20 to 40 percent of the entitlement of the parishes of a denomination is allocated to all parishes of this denomination (basic contribution). The difference to this percentage up to 100 percent of the entitlement of the parishes of a denomination is allocated to the parishes of this denomination according to their tax capacity (tax capacity share).

2. The percentage for distribution among the parishes is determined annually for each denomination by the legislature of the cantonal organization of the respective denomination by no later than the end of June of the year preceding the year of enforcement and is communicated to the department in writing.

1. The distribution to all parishes of a denomination is carried out in accordance with the number of members of the denomination.

1. The resource equalization reduces the differences in the financial capacity of parishes.

2. The redistributed funds are allocated to the parishes without any specified purpose.

3. Instruments include disparity compensation, minimum provision, and residual sum equalization.

1. Basis for the Calculation of Resource Equalization are the State Tax Revenue and the Number of Church Parish Members.

1. The State Tax Revenue (STR) of a parish is the sum of the state taxes of the denominational members from the annual accounts of this parish with a tax rate of 100 percent.

2. The government council issues regulations concerning the types of taxes and levies falling under this category.

1. The number of congregation members in the parish according to the cantonal population statistics is decisive.

2. The department may conduct its own survey. If it conducts its own survey, the number of congregation members in the parish according to this survey is decisive.

1. The taxable capacity of a parish is the ratio of its state tax revenue to the number of its adherents.

2. The taxable capacity of a denomination is the ratio of the sum of the state tax revenue of all parishes of a denomination to the total number of adherents of that denomination.

3. The Taxable Capacity Index (TCI) of a parish is the ratio of its taxable capacity to the taxable capacity of the respective denomination, expressed as a percentage.

1. The disparities adjustment reduces the differing financial capacities of the church congregations. It is financed exclusively by the church congregations.

2. Church congregations with an SKI greater than 100 are required to make a contribution.

3. Church congregations with an SKI less than 100 receive a benefit.

4. The disparities adjustment reduces the difference between a congregation's SKI and the SKI of 100 by 0 to 8 percent.

5. The legislative body of the cantonal organization of the respective denomination decides annually, no later than the end of June of the preceding year for the effective year, on the applicable percentage according to Formula A of the appendix and communicates this in writing to the department.

1. The minimum provision aims to provide resource-poor church congregations with sufficient means so that they can economically and efficiently fulfill their public duties.

2. Church congregations that, after the disparity compensation, have an SKI below a certain minimum level are entitled to a minimum provision.

3. The minimum provision compensates the difference between a church congregation's SKI and the established minimum level.

4. The legislature of the cantonal organization of the respective denomination decides annually, no later than the end of June of the year preceding the year of effectiveness, on the applicable minimum level of the SKI within the range of 60 to 90 and communicates this in writing to the department.

5. The minimum provision is calculated according to Formula B of the Annex.

1. The sum of the funds from the tax capacity share, which remains after the allocation of the minimum equipment, is distributed among the parishes with a TCI less than 100.

2. The TCI after disparities equalization and after minimum equipment is decisive.

3. Parishes entitled under paragraph 1 receive a contribution per member of the denomination proportional to the difference between their tax capacity and the average tax capacity of the respective denomination.

4. The distribution of the remaining sum according to TCI is calculated using Formula C of the Annex.

1. The purpose of the upper and lower limits is to prevent an excessively strong relief or burden on individual church communities.

2. The upper limit determines the maximum percentage that the contribution from the financial equalization, measured against the state tax revenue of a church community, may constitute. The upper limit is set within a range of 5 to 30 percent of the state tax revenue.

3. The lower limit determines the maximum percentage that the levy into the financial equalization, measured against the state tax revenue of a church community, may constitute. The lower limit is set within a range of 1 to 5 percent of the state tax revenue.

4. The upper and lower limits are to be set in such a way that the sum of the funds, which are retained by the beneficiary church communities due to the upper limit, is greater than the sum of the funds which are waived for the obligated church communities due to the lower limit.

5. The surplus resulting from paragraph 4 is distributed to those church communities with a SKI of less than 100 based on the number of congregants.

6. The legislative body of the cantonal organization of the respective denomination decides annually, by no later than the end of June of the year preceding the effective year, on the upper and lower limits and communicates these to the department in writing.

7. The effects of the upper and lower limits are calculated using Formula D of the annex.

**1. The Share of the Cantonal Organization is to be Used for the Following Areas of Responsibility After Deducting Administrative Costs:**

a) For societal regional and societal cantonal tasks;

b) For the support of services with a societal character by third organizations;

c) For investment contributions to parish communities, but a maximum of 20 percent of the available amount.

**2. The Cantonal Government Defines the Fields of Duties within the Areas of Responsibility and the Quality of Service Delivery by Regulation.**

**3. The Cantonal Government May, By Regulation, Establish Additional Fields of Duties Each Year of the Publication of the Performance Report According to § 20 Based on a Joint Request from All Cantonal Organizations.**

**4. The Funds Are to Be Utilized Timely by the Cantonal Organization.**

**5. Any Interest Income from the Interim Financial Investment of the Share of the Cantonal Organization Must Be Disclosed and Used in Accordance with Paragraph 1.**

**6. The Use of This Share is Subject to the Supervision of the Cantonal Government. The Department May Issue Instructions on the Manner of Accountability Reporting to the Cantonal Government and on the Accounting for the Use of These Funds.**

1. The cantonal organizations shall prepare a joint performance report on the use of their share of the financial equalization funds to the public six years after this law comes into effect and thereafter every six years, each time in the first quarter of the subsequent year.

2. The governing council shall regulate the requirements for the performance report and the manner of its publication by ordinance.

1. Parish communities that suffer financial losses due to a merger under the present financial equalization scheme will have the difference compensated for a period of three years.

2. This compensation is provided, provided that at least one of the parish communities involved in a merger has an SKI of less than 100.

3. The government council shall issue implementation regulations on the allocation of these contributions by means of an ordinance.

1. The foundations for calculating the financial equalization are formed in particular by the data from the annual accounts of the church communities averaged over two base years, the number of members of the denomination averaged over two base years, as well as all other statistical sources mentioned in this law.

2. The government council shall determine by ordinance the data sources, the method of data collection, the nature of the data, the deadlines, and the base years.

3. The church communities are obligated to provide all necessary data.

1. The Church Parishes Financial Equalization Fund is intended particularly for financing contributions in financial equalization pursuant to § 5 paragraph 3, and there specifically for financing in resource equalization pursuant to § 10, for financing the share of the cantonal organization pursuant to § 19, and to cover administrative costs pursuant to § 29.

2. The Church Parishes Financial Equalization Fund is funded by revenues from the financial equalization tax pursuant to § 5 paragraph 2, through funds from the canton pursuant to § 5 paragraph 4, and by contributions from the church parishes pursuant to § 15.

1. The fund is to bear interest.

2. If, after the completion of all transactions resulting from a fiscal equalization year, the fund balance results in a surplus exceeding 2 million Swiss francs, the portion of the fund balance exceeding 2 million Swiss francs is to be transferred at the end of the year to the Fiscal and Financial Adjustment Fund for use of funds pursuant to Sections 21 and 22 of the Law on the Fiscal and Financial Adjustment of Municipalities (Fiscal and Financial Adjustment Act, FILAG EG) of November 30, 2014.

1. The department calculates annually the distribution of funds, the disparity compensation, the minimum equipment, the distribution of the residual amount according to SKI, and the effects of the upper and lower limits according to the formulas in the annex and communicates them to the church communities.

2. The department calculates annually the shares of the cantonal organizations and communicates them to these organizations.

3. The department carries out the calculations resulting from § 21 and communicates them to the church communities.

1. The department is authorized to reduce the contribution it has calculated for a church municipality or to increase the levy it has calculated for a church municipality if the church municipality

a) does not fulfill its tasks economically and frugally, or

b) does not comply with the legal regulations concerning the financial budget and accounting of the municipalities.

1. The department is authorized to reduce the share it calculates for a cantonal organization if the cantonal organization

a) does not fulfill its tasks economically and efficiently or

b) does not comply with the legal provisions regarding the financial management and accounting of the municipalities or

c) does not use its funds from the financial equalization for the specified areas of responsibility.

1. Contributions or levies from church parishes or shares from cantonal organizations that have been determined and paid out or demanded based on incorrect information or calculations must be corrected by the department and communicated to the church parishes or cantonal organizations.

2. The department may recover interest on any resulting difference amounts from the church parishes or cantonal organizations, or pay them to the church parishes or cantonal organizations.

3. Such corrections are either deposited into or withdrawn from the church parish financial equalization fund.

4. If the determination of a contribution or levy from a church parish or a share from a cantonal organization dates back more than five years, no further corrections shall be made.

1. The administrative costs incurred by the canton from the execution of the financial equalization in the previous year shall be charged to the Church Municipalities Financial Equalization Fund in accordance with the actual expenditure.

1. Amounts below an amount determined by the government council through regulation shall neither be disbursed nor demanded in the financial equalization.

1. The Roman Catholic Synod of the Canton of Solothurn is considered the cantonal organization of the Roman Catholic denomination.

2. The Christian Catholic Synodal Association of the Canton of Solothurn is considered the cantonal organization of the Christian Catholic denomination.

3. The Association of the Evangelical Reformed Synods of the Canton of Solothurn is considered the cantonal organization of the Evangelical Reformed denomination. The Association includes the Evangelical Reformed Church of the Canton of Solothurn and the District Synod of Solothurn of the Reformed Churches Bern-Jura-Solothurn. The Association is to be structured and managed in accordance with the provisions on the purpose association pursuant to §§ 166 et seq. of the Municipal Act dated February 16, 1992. The statutes or amendments to the statutes of the Association must be approved by the Governing Council. Within the scope of approving the statutes, the Governing Council may allow deviations from the §§ 166 et seq. of the Municipal Act concerning the organizational structure of the Association. If the statutes of the Association do not provide for a classic legislature, the executive is responsible for fulfilling the tasks assigned to the legislature of the cantonal organizations by this law.

4. If the legal form or designation of any of the aforementioned cantonal organizations changes, the Governing Council is authorized to make the necessary corrections at the ordinance level.

1. Parishes and cantonal organizations may file an objection against decisions of the Department.

2. The objection period is 30 days from the notification of the decision.

3. The objection must be submitted in writing to the Department. It should include a petition and a statement of reasons. Section 33, paragraph 2 of the Act on Legal Protection in Administrative Matters (Administrative Procedure Act) of November 15, 1970, is applicable.

1. The parishes and the cantonal organizations may file an appeal with the administrative court against opposition decisions made by the department.

2. The period for filing an appeal is 10 days from the date of delivery of the decision.

1. Additionally, the procedure is governed by the Administrative Procedure Act.

1. The Executive Council shall issue the necessary implementing ordinance.

1. The Executive Council and the cantonal organizations establish, at the time of coming into force for the first implementation year and for the subsequent six implementation years, all the values mentioned in the present law and the formula annex, which are thereafter decided annually or, in each case, in the year of publication of the performance report according to § 20 by these entities.

1. The resources of the previous fund for the financial equalization of the church congregations (account 209004/014) shall be transferred to the Church Congregations Financial Equalization Fund in accordance with § 23 upon the entry into force of this law.

1. The Hardship Compensation ensures a balancing among the church congregations to mitigate hardships arising from the transition from the previous financial equalization system to the new one. This compensation takes effect after the remaining balance equalization according to § 17 and before the application of the upper and lower limits according to § 18.

2. The Hardship Compensation is granted during the first six years of implementation.

3. The Government Council shall establish by ordinance the implementing provisions for each denomination, in particular the maximum relief and burden limits, as well as the gradation over the six years.

4. Any surplus from the Hardship Compensation shall be distributed among those church congregations with a SKI (Standardized Contribution Index) less than 100, based on the number of adherents to the denomination.

5. The calculation of the Hardship Compensation is conducted according to Formula E of the Appendix.

6. The funds are provided to the eligible church congregations without any specific purpose restriction.

**1. In the first four years of implementation following the enactment of this law, the financial losses according to § 21 paragraph 1 shall be calculated in accordance with the provisions in paragraph 2.**

**2. Parish communities that suffer financial losses due to a merger shall be compensated for the difference to the balancing payment that they would have received under the previous law on direct financial equalization (Financial Equalization Act) of December 2, 1984.**

1. Corrections of Contributions and Levies in Accordance with § 74 of the Direct Financial Equalization Act (Financial Equalization Act) of December 2, 1984, in the Existing Financial Equalization of Church Communities May Still Be Made Within the Time Limits According to Previous Law.

1. The department conducts all calculations and adjustments arising from the present transitional provisions and announces these.