French General Code of Local Authorities
In forceI. - The national equalisation grant comprises a main share and a top-up.
II. - This allocation is distributed among the municipalities under the conditions specified in III, IV, V and VI, after deduction of the sums required for the share intended for the municipalities of the overseas departments, New Caledonia, French Polynesia, the territorial collectivity of Saint-Pierre-et-Miquelon, the territorial constituencies of Wallis and Futuna and the departmental collectivity of Mayotte. This share is calculated by applying the demographic ratio mentioned in the fourth paragraph of article L. 2334-13. It is distributed in accordance with the conditions laid down by decree in the Conseil d'Etat.
III. - Communes in metropolitan France that meet the following two conditions are eligible for the main part of the allocation:
1° The per capita financial potential is less than the average per capita financial potential plus 5% of all communes belonging to the same demographic group.
2° The tax effort is greater than the average tax effort of communes belonging to the same demographic group.
By way of derogation from the first to third paragraphs, the second condition is not taken into account for municipalities whose business property tax rate is equal to the ceiling provided for in IV and V of article 1636 B septies of the General Tax Code. By way of derogation from the preceding provisions, communes with at least 10,000 inhabitants whose financial potential is 15% less than the average financial potential per inhabitant of all the communes belonging to the same demographic group and whose tax effort is greater than 85% of the average tax effort of the communes belonging to the same demographic group are eligible for the allocation under the conditions set out in IV.
Municipalities that meet the first condition but not the second, without their tax effort being less than 85% of the average tax effort of municipalities belonging to the same demographic group, are eligible for an allocation under the conditions defined in IV.
III bis. - (Repealed).
IV. - The main part of the allocation is distributed under the following conditions:
The per capita allocation accruing to each eligible metropolitan municipality is determined in proportion to the relative difference between the average per capita financial potential of all the municipalities belonging to the same demographic group and the per capita financial potential of the municipality.
However, municipalities eligible for the main part of the allocation pursuant to the fifth paragraph of III benefit from an allocation reduced by half.
When an allocation accruing to a municipality decreases by more than half compared to that of the previous year, this municipality receives, as a non-renewable guarantee, an allocation equal to half of that which it received the previous year.
When a commune ceases to be eligible for the main part of the allocation, this commune receives, as a non-renewable guarantee, an allocation equal to half of that which it received the previous year.
The allocation due to a commune may in no case take into account the amounts allocated the previous year under the guarantees mentioned in the fourth and fifth paragraphs of this IV.
When a municipality has no resources in respect of council tax on second homes and other furnished premises not used as a main residence, property tax on built and unbuilt properties and the additional tax on property tax on unbuilt properties, it is deemed eligible for the main part and the per capita allocation due to the municipality is equal to eight times the national average per capita allocation. This allocation is increased to twelve times the average national per capita allocation when the municipalities concerned are members of a public establishment for inter-municipal cooperation with their own tax status.
The total amount of allocations due in metropolitan France to eligible municipalities with 200,000 or more inhabitants is equal to the product of their population multiplied by the average per capita allocation received the previous year by these municipalities.
V. - The increase in the national equalisation allocation is distributed among eligible municipalities with fewer than 200,000 inhabitants in proportion to their population and the relative difference between the average per capita tax potential, calculated on the basis of the products mentioned in 2° of I of article L. 2334-4 and the amounts received by the municipality and the grouping the previous year in respect of the levy on State revenue provided for in III of Article 29 of Law no. 2020-1721 of 29 December 2020 on finance for 2021, for its part compensating for the loss of revenue from business property tax resulting from A of I of the same Article 29, from all the municipalities belonging to the same demographic group and the municipality's per capita tax potential, calculated on the basis of the same products and amounts.
Only municipalities whose per capita tax potential is 15% lower than the per capita tax potential of the same demographic group are eligible.
VI. - With effect from 2012, the allocation under the main share or the increased share of the national equalisation grant accruing to an eligible municipality may not be less than 90% or more than 120% of the amount received the previous year.
When a commune ceases to be eligible in 2012 for the main share or the increased share of the national equalisation grant, it will receive, by way of guarantee, an allocation equal to 90% in 2012, 75% in 2013 and 50% in 2014 of the amount received in 2011 for the share of the grant to which it is no longer entitled.
VII. - No allocation calculated pursuant to the preceding paragraphs shall be paid if its amount is less than or equal to 300 euros.
VIII. - The terms and conditions for the application of this article are set by decree in the Conseil d'Etat. Failing this, Decree no. 85-260 of 22 February 1985 relating to the procedures for distributing the resources of the national business tax equalisation fund and the national equalisation fund and Decree n° 85-1314 du 11 décembre 1985 relatif aux modalités de répartition des ressources du fonds national de péréquation de la taxe professionnelle et du Fonds national de péréquation dans les départements d'outre-mer s'appliquent, en ce qui concerne le présent article.
