IV. GERMANY

The Constitution states that the Bundesrat draws up its own Rules of Procedure (GG, Art. 52). Like the Bundestag, it has established a permanent Finance Committee for examining the draft budget. The work of this committee is assisted by a sub-committee comprising financial specialists of the Länder governments. Any joint committees of the two chambers are established by the procedural rule of the Bundestag (GG, Art. 53a). A Mediation Committee has been established, which, inter alia, resolves budget disputes between the two chambers.

3.1.6. Establishment and roles of other constitutional bodies

The Constitution creates a Constitutional Court (GG, Art. 93) and other high-level courts. Of relevance for budget system laws is the Federal Administrative Court (for adjudicating disputes on decisions and actions by the administration), a Federal Finance Court (for tax disputes) and a Federal Social Court (for social security disputes) (GG, Art. 95). The GG also authorises the Federation to establish federal courts for disciplinary proceedings, or the pursuance of complaints, against federal public servants (GG, Art. 96).

3.2. Role and responsibilities of sub-national governments

The Constitution establishes separate and autonomous governments at three levels. Although federal law takes precedence over Länder law (GG, Art. 31), the Constitution was designed to provide the Länder with strong legislative powers. In particular, the exercise of governmental powers and the discharge of governmental functions are incumbent on the Länder unless otherwise provided or permitted in the Constitution (GG, Arts. 30 and 70). The Constitution specifies areas where the Federation has exclusive legislative powers (for example, the foreign service, federal waterways and shipping, border guards, central police, communications), as well as those where the Federation and the Länder have concurrent legislative powers (Arts. 70-74a). Social insurance institutions, whose competence extends beyond that of one Land, are administered as direct corporate bodies – either at federal or Länder level.

The Constitution elaborates on all important issues concerning intergovernmental financial relations. Legislative powers concerning revenues, revenue assignments and revenue administration are elaborated in detail (GG, Arts. 105-108). While some taxes are assigned to one level of government exclusively, revenues from all major taxes are shared among the Federation, the Länder, and the municipalities (Gemeinden). Revenue from shared taxes is redistributed horizontally among the Länder by equalisation transfers (Finanzausgleich), and vertically by general or special add-on transfers from the Federation to the financially weaker Länder. Both types of transfer are governed by specific laws. The Constitution also authorises the Federation to