Section 7: Transformation and merger.

I. - Public establishments for intercommunal cooperation, at least one of which has its own tax status, may be authorised to merge under the following conditions.

The proposed perimeter of the new public inter-municipal cooperation establishment envisaged may be set by order of the State representative in the department when the communes are part of the same department, or by joint order of the State representatives in the departments concerned in the opposite case:

1° Either within two months of the first deliberation transmitted, on the initiative of one or more municipal councils of the member communes or of the deliberative body of the public establishment(s) for inter-communal cooperation whose merger is envisaged;

2° Or on the initiative of the representative(s) of the State;

3° Or on the initiative of the departmental commission(s) for inter-communal cooperation.

The decree establishing the proposed perimeter lists the public establishments for inter-municipal cooperation concerned and determines the category of the public establishment for inter-municipal cooperation with its own tax status envisaged in accordance with the first paragraph of III. The draft perimeter, which is in one piece and without an enclave, may also include communes whose inclusion is likely to ensure the spatial and economic coherence as well as the financial solidarity necessary for the development of the new public establishment in compliance with the departmental inter-municipal cooperation plan.

The draft perimeter, accompanied by an explanatory report and a budgetary and fiscal impact study, is notified by the State representative(s) in the department to the mayor of each commune included in the draft perimeter. The municipal councils have a period of three months from the date of notification to decide on the proposed scope, category and articles of association of the new public inter-municipal cooperation body. In the absence of a decision within this timeframe, their opinion is deemed to be favourable.

The draft perimeter is also submitted for opinion by the State representative(s) in the department to the public establishments of inter-municipal cooperation whose merger is envisaged. In the absence of a decision within three months of transmission of the draft decree, their opinion is deemed to be favourable.

The draft perimeter, accompanied by the explanatory report, the impact study and the decisions of the communes and the public establishments for inter-municipal cooperation, is notified to the competent departmental commission for inter-municipal cooperation by the representative(s) of the State in the department. When a project involves municipalities or public establishments for inter-municipal cooperation belonging to different départements, the commissions concerned meet in an inter-departmental formation. In the absence of a decision within two months of notification, the opinion of the commission(s) is deemed to be favourable.

Proposals to modify the proposed perimeter adopted, in compliance with the objectives set out in I and II of article L. 5210-1-1 and the guidelines defined in III of the same article, by the departmental commission(s) for inter-communal cooperation by a two-thirds majority of their members are incorporated into the decree of the representative(s) of the State in the department.

II. - The merger may be decided by decree of the representative(s) of the State in the department(s) concerned, after agreement of the municipal councils on the decree drawing up the list of public establishments and municipalities included in the proposed perimeter and on the articles of association. This agreement must be expressed by at least two thirds of the municipal councils of all the municipalities included in the proposed perimeter, representing more than half of the total population of these municipalities, or by at least half of the municipal councils of municipalities representing two thirds of the population. These majorities must include at least one third of the municipal councils of the municipalities that are grouped together in each of the public establishments of inter-municipal cooperation whose merger is envisaged. Subject to their agreement, the decree constitutes the withdrawal of the communes from the public establishments of inter-municipal cooperation of which they are members and which are not fully included in the proposed perimeter.

III. - The public establishment resulting from the merger comes under the category of that of the public establishments of inter-municipal cooperation with their own tax status included in the project to which the law has conferred the greatest number of competencies or a category with a greater number of compulsory competencies, provided that it meets the conditions for the creation of the public establishment provided for the latter.

The competences transferred by the municipalities to the public establishments existing before the merger, on a compulsory basis, are exercised by the new public establishment over its entire perimeter.

The competences transferred on an additional basis without prejudice to the provisions of II of the articles L. 5214-16 and L. 5216-5, the competences transferred on an optional basis and those transferred on an additional basis by the municipalities to the public establishments of inter-municipal cooperation existing prior to the merger are exercised by the new public establishment of inter-municipal cooperation with its own tax status over its entire perimeter or, if the deliberative body of the latter so decides within two years of the entry into force of the decree deciding the merger, are returned to the municipalities. The decision of the deliberative body may provide for these powers to be transferred in part. Until this deliberation or, at the latest, until the expiry of the aforementioned period, the new public establishment exercises, within the former perimeters corresponding to each of the public establishments of inter-municipal cooperation that have merged, the competences transferred on an additional basis by the communes to each of these public establishments.

In the event that the new public establishment falls into a category with a greater number of compulsory powers than the merging public establishments, the articles of association must, where applicable, provide for new powers in order to comply with the conditions relating to the compulsory powers laid down by law for this category.

Where the exercise of the powers of the new public establishment is subject to recognition of their community interest, this interest is defined no later than two years after the entry into force of the decree declaring the merger. Failing this, the public body will exercise all the powers transferred. Until the community interest is defined, that which was defined within each of the merged public establishments of inter-municipal cooperation is maintained within the former perimeters corresponding to each of these establishments.

All the assets, rights and obligations of the merged public establishments of inter-municipal cooperation are transferred to the public establishment resulting from the merger.

When the merger involves the transfer of competences from the communes to the new public establishment, these transfers are carried out under the financial and asset conditions provided for in the fourth and fifth paragraphs of Article L. 5211-17.

The public establishment resulting from the merger is automatically substituted, for the exercise of its powers, for the former public establishments and, where applicable, for the municipalities included within its perimeter in all their deliberations and all their acts.

Contracts are performed under the previous conditions until they expire, unless the parties agree otherwise. The co-contracting parties are informed of the substitution of legal entity by the public establishment resulting from the merger. The substitution of a legal entity for contracts concluded by public establishments of inter-municipal cooperation and municipalities does not give rise to any right to termination or compensation for the co-contractor.

The merger of public establishments is carried out free of charge and does not give rise to the payment of any compensation, duty, tax, contribution provided for in article 879 of the general tax code or honorarium.

All the staff of the merged public establishments of inter-municipal cooperation are deemed to come under the public establishment resulting from the merger under the conditions of status and employment that are theirs. Employees shall retain, if they have an interest in doing so, the benefit of the compensation scheme that was applicable to them as well as, on an individual basis, the benefits acquired in application of the third paragraph of article 111 of law no. 84-53 of 26 January 1984 on the statutory provisions relating to the local civil service.

IV. - The number and distribution of the members of the deliberative body of the new public establishment are determined under the conditions provided for in Article L. 5211-6-1.

Until the next general renewal of the municipal councils following the creation of the new establishment, the members are appointed under the conditions provided for in 1° of Article L. 5211-6-2.

V. - The term of office of the members in office prior to the merger of the public establishments for inter-municipal cooperation is extended until the installation of the new deliberative body no later than the Friday of the fourth week following the merger. The chairmanship of the institution resulting from the merger is, on a transitional basis, held by the eldest of the chairmen of the public institutions that have merged. The powers of the members and the chairman are limited to acts of protective and urgent administration.