BASIC LAW: THE STATE ECONOMY (5735 - 1975)

(Unofficial translation by Dr. Susan Hattis Rolef)

Taxes, mandatory 1. (a) Taxes, mandatory loans and other mandatory payments,
loans and fees shall not be introduced, and their rates shall not be
(Amendment No. 1) changed, save by law, or on its basis. The same applies
to fees.

(b) Taxes, mandatory loans, other mandatory payments and

fees that are paid to the State treasury, and whose rates
have not been determined in the law itself, and there is
no provision in the law to the effect that their
determination in regulations requires the approval of
the Knesset, or of one of its Committees, their
determination in regulations requires prior approval, or
approval within the period laid down by law - by means
of a Knesset decision, or a decision by one of its
Committees authorized for this purpose by the Knesset.

State assets 2. Transactions in state assets, the acquisition of rights, and the
assumption of liabilities in the name of the State, shall be
done by a person authorized to do so by law, or on the basis
of the law.

The State budget 3. (a) (1) The State budget shall be set by law.
(Amendments No. 1,

2, 7, 8 & 9) (2) The budget shall be for one year, and shall
present the Government's expected and planned
expenditure.

(b) (1) The Government shall lay the Budget Bill on the
Knesset's table at the time determined by the
Knesset Finance Committee, but no later than
sixty days after the beginning of the financial
year. However, in the period mentioned in
article 36a(b) of Basic Law: the Knesset, the
Budget Bill shall be laid on the Knesset table at a
time determined by the Knesset Finance
 Committee, but no later than 45 days before the
prescribed day mentioned in that article.

(2) The Budget Bill shall be detailed.

(3) The detailed budget proposal of the Defense

Ministry, and the detailed budget proposal of
defense bodies that shall be determined with
regards to this matter by law, shall not be laid on
the Knesset table, but on the table of a joint
committee of the Knesset Finance Committee
and Foreign Affairs and Defense Committee.

(4) The Finance Bill shall be accompanied by an

estimate of the sources for financing it.

(c) If necessary the Government is entitled to submit an

additional Budget Bill in the course of the financial
year.

(d) Should the government foresee that the Budget Law

shall not be approved before the beginning of the
Financial Year, it is entitled to submit an Interim
Budget Bill.

(e) Every year, the Minister of Finance shall submit to the

Knesset a report on the implementation of the State
Budget. Details shall be laid down by law.

Multiannual budget 3a. (a) Towards every financial year the Government shall
(Amendment No. 4) prepare a multiannual budget that will include the
Budget Bill for the coming year, as well as a budget
plan for the following two consecutive years.

(b) The Government shall lay on the Knesset table the

Multiannual Budget Program together with the Budget
 Bill.

(c) Every Budget Bill submitted by the Government to the

Knesset shall be based on the Multiannual Budget
Program that was prepared and laid on the Knesset
table on the basis of this article in the previous year.

Non-adoption of the 3b. (a) Should the Budget Law fail to be adopted before the
Budget Law beginning of the financial year, the Government is
(Amendments Nos. 5 entitled to spend every month a sum equivalent to one
& 8) twelfth of the annual budget for the previous year, with
the addition of linkage to the consumer price index,
which is published by the Central Bureau of Statistics.

(b) Funds on the basis of clause (a) shall be earmarked

first of all to fulfilling the State's obligations by force of
laws, contracts and treaties. The remainder shall be
used by the Government only to implement vital
services, and activities that were included in the
previous Budget Law, including those added by means
of budgetary changes.

(c) This article is not to be altered save by a majority of the

Knesset Members.

Legislation requiring a 3c. (a) A budgetary bill shall not be adopted by the Knesset,
budget (amendment save by the votes of at least 50 Knesset Members. The
No. 6) said majority is required in First Reading, in Second
Reading, and in Third Reading. However, should a bill
turn into a budgetary bill after the First Reading, the
said majority in required in Second Reading, and in
Third Reading.

(b) A budgetary reservation shall not be adopted by the

Knesset save by the votes of at least 50 Knesset
Members. Should a budgetary reservation to a bill be
adopted, the Bill shall not be approved by the Knesset
in Third Reading, save by the votes of at least 50
Knesset Members.
(c) In relation to this article, the determination of the
budgetary cost of a bill or reservation shall be
performed by one of the Knesset Committees
deliberating that Bill or reservation (hereafter - the
Committee). The Committee shall determine the
budgetary cost, on the basis of the evaluation of the
Minister of Finance, or anyone authorized by him for
this purpose, unless it has been proven, to its
satisfaction, on the basis of some other evaluation
submitted to it, that the budgetary cost is different from
the estimation of the Minister of Finance. evaluations
on the basis of this article shall be submitted with
attached figures and estimates.

(d) In this article -

"A budgetary bill" - a bill to which all the following

apply:

(1) It was submitted by someone other than the

Government;

(2) Its implementation involves a budgetary cost of

5 million NIS or more, in any given budget
year;

(3) The Government did not approve the budgetary

cost;

"A budgetary reservation" - a reservation to a bill, in

which all the following apply:

(1) Its implementation involves a budgetary cost of

5 million NIS or more, in any given budget
year;
 (2) The Government did not approve the
budgetary cost;

"Budgetary cost" - an expenditure or a commitment for

expenditure from the State Budget, or a diminution of
State revenue, even if the aforesaid expenditure or
reduction is accompanied by a reduction of expenditure
or commitments for expenditure from the State
Budget, or an increase of the state revenue;

"Expenditure from the State budget", "a reduction of

State revenue" - including expenditure from the budget
of a budgeted body, or a reduction of the revenues of a
budgeted body;

"A budgeted body" - as defined in article 21 of the

Foundations of the Budget Law, 5745-1985.

(e) The sums specified in the definitions of "budgetary

bill" and "budgetary reservation" in clause (d) shall be
updated on 1 January of every year, on the basis of the
rate of change in the consumer price index published by
the Central Bureau of Statistics.

(f) The provisions of this article shall not apply to a bill

concerning the dissolution of the Knesset, and the
holding of elections.

Currency bills and 4. The printing of currency bills and the minting of coins that
coins shall serve as legal tender, as well as the issue thereof, shall
be done in accordance with the law.

5. The State economy shall be subject to the inspection of the

State Comptroller.