Involvement of the Bundesrat

This stage in the procedure may come as a surprise to begin with. Why is the Government’s bill not forwarded immediately to the Bundestag to be dealt with under parliamentary legislative procedure? The so-called first passage in the Bundesrat provided for in Article 76 of the Basic Law results from the Bundesrat’s extensive rights to participate in the legislative process once the bill has been adopted by the Bundestag (this will be considered in detail later on). The Bundesrat could at least delay the entry into force of bills to which it may lodge an objection and even prevent many laws requiring its consent from ever entering into force. So that the views of the Bundesrat and the Länder become known in good time, the Basic Law provides for the Bundesrat to make initial comments on the draft law even before it is submitted to Parliament; the Government thus has an opportunity to take the counterproposals of the Bundesrat into consideration or attach to the draft a written statement of its position on these proposals. The comments of the Federal Government on any objections the Bundesrat may lodge are known as a counterstatement; like the comments of the Bundesrat, which have to be submitted within 6 weeks, this counterstatement is attached to the original bill either straight away or in good time. Thus the following documents are submitted to the Bundestag: the draft law drawn up by the Federal Government together with an explanatory memorandum; the comments of the Bundesrat; the counterstatement of the Federal Government on the comments of the Bundesrat and the statement of the National Regulatory Control Council (in some cases accompanied by a reaction from the Federal Government). The documents submitted to the Bundestag at the beginning of the legislative process thus already reveal important aspects which may possibly give rise to conflict between the Federation and the Länder at a later stage.

The Federal Government’s draft law, together with the explanatory memorandum, the comments of the Bundesrat, the counterstatement of the Federal Government and the statement of the National Regulatory Control Council, is transmitted to the Bundestag by the Federal Chancellor with a covering letter to the President of the Bundestag. An example of this sort of covering letter is reproduced below. It relates to the government draft of the Act for the Promotion of Families and Household-related Services (Family Benefits Act - Familienleistungsgesetz) of 22 December 2008, which was published on pages 2955 et seq. of the Federal Law Gazette, Part I, for 2008. In the following pages, this bill will be considered as it passes through the various stages of the legislative process. The aim of the bill was to assist families by increasing child benefit and the tax allowance for dependent children, by establishing school-requisites grants for children from low-income families and by improving tax relief for expenditure on what are defined as household-related services - the services of gardeners and cleaners and care and support services for dependants, for example. To this end, several laws had to be amended, particularly the Income Tax Act, the Federal Child Benefit Act and Books Two and Twelve of the German Social Code. A separate article in the bill was dedicated to each of these instruments. This was thus a so-called 'article law', a law containing a number of articles putting in place new legislation and setting forth the amendments to existing legislation required as a result.

The interests of the Länder were particularly affected by the bill because it included provisions relating to taxation revenue, which is partially passed on to the Länder. It was therefore a so-called 'consent law', a law which cannot enter into force without the consent of the Bundesrat. Accordingly, the opening formula of the new law reads: "The Bundestag has adopted the following law with the consent of the Bundesrat: ..."

German Bundestag - 16th electoral term Printed paper 16/10809

Federal Republic of Germany
The Federal Chancellor

Berlin, 7 November 2008

Dr Norbert Lammert
President of the German Bundestag
Platz der Republik 1
11011 Berlin

Dear Mr President,

I enclose the Draft Act for the Promotion of Families and Household-related
Services (Family Benefits Act - Familienleistungsgesetz) adopted by the Federal
Government, together with the explanatory memorandum and introductory page
(Annex I).
I ask you to initiate the necessary proceedings for the German Bundestag to take a
decision on this bill.
The Federal Ministry of Finance bears overall responsibility for this bill.
The opinion of the National Regulatory Control Council pursuant to section 6(1)
of the Regulatory Control Council Act (Normenkontrollratsgesetz) is enclosed as
Annex 2.
The Bundesrat decided at its 850th sitting on 7 November 2008, in line with
Article 76(2) of the Basic Law, to comment on the bill as set forth in Annex 3.
The view of the Federal Government on the comments of the Bundesrat will be

Yours sincerely,

Angela Merkel

In connection with the parliamentary reform process, the Bundestag called for every bill to be accompanied by what is known as an introductory page. This was accepted by the Federal Government and has been standard practice since 1969. Such introductory pages briefly describe the objectives of the bill, the proposed solution and possible alternatives and the cost of the proposed solution:

German Bundestag
16th electoral term

Printed paper 16/10809

7 November 2008


introduced by the Federal Government
Draft Act for the Promotion of Families and Household related-
Services (Family Benefits Act)

A. Problem and objective

Investments in families are investments in the future. For this
reason, considerable improvements are to be made to the
system of state compensation for family services in accordance
with the principle of a sustainable families policy.
The Federal Government attaches high priority to reinforcement
of the family and support for households as an area with scope
for new employment opportunities. In addition, the relevant
statutory provisions are to be made more people-centred.

B. Solution

  • The tax allowance for each dependent child is to be increased
    by €192 from €3,648 to €3,840. This means that the total tax
    allowances per child will be increased from €5,808 to €6,000.
  • Child-benefit payments for first and second children will each
    be increased by €10 from €154 to €164 per month, for third
    children by €16 from €154 to €170 and for fourth and
    subsequent children by €16 from €179 to €195.
  • The tax rules governing household-related contributory
    employment and household-related services, including care
    services, which have hitherto been grouped under several
    separate headings, will be gathered into a provision for the
    support of households in their role as customers of service
    providers or as employers of persons for whom welfare
    contributions are payable. Support will be considerably
    increased to a uniform rate of 20% of expenditure up to
    €20,000, making a support ceiling of €4,000 per annum.
  • The rules on tax relief for the cost of child care, though not
    substantively amended, will be concentrated into a single
  • Under the Second and Twelfth Books of the German Social
    Code (Sozialgesetzbuch II and Sozialgesetzbuch XII), an
    additional payment of €100 will be made for school expenditure
    in respect of each pupil at the start of the school year.

C. Alternatives


D. Financial effects on the public budget

1. Budget expenditure excluding cost of execution

 (a) Increase/decrease (-) in tax revenue (in €m.)

Tier of government

Full annual impact1

Financial year






All tiers




























1 Impact for a full tax year.

(b) Other budget expenditure

The increase and graduation of child benefit under the Federal
Child Benefit Act will cost the federal treasury up to €7m. a year.
Because of the increased child benefit, the federal treasury and,
to a lesser extent, the treasuries of the local authorities will incur
about €230m. less expenditure on jobseekers’ subsistence
allowance (Arbeitslosengeld II), while the local authorities will
save some e18m. a year on benefits under Book XII of the Social
Code. As for maintenance payments under the Maintenance
Advances Act (Unterhaltsvorschussgesetz), the federal treasury
will save up to €20m. a year and the Länder up to €40m. a year as
a result of the reckonability of child benefit. In the case of the
amounts collected under section 7 of the Maintenance Advances
Act, the federal treasury will simultaneously lose out on up to
€4m. in revenue, while the loss of Länder revenue could reach

The new school benefit will cost the Länder and local authorities
€2m. a year under the new section 28a of Book XII of the German
Social Code, while the annual bill for the federal treasury will
amount to €119m. (German Social Code, Book II, new section

2. Cost of execution

It is not expected that the proposed act will make any additional
demands on the material and personnel budget of the Federal
Central Tax Office (Bundeszentralamt fu¨ r Steuern).

 E. Other costs

Other than the administrative costs that are set out separately
below, the proposed act will not generate additional costs for the
economy, including small and medium-sized enterprises. No
impact on unit prices, general price levels or the consumer price
index is to be expected.

There is no indication of any unintended side effects within the
meaning of Rule 44(1) of the GGO, the Joint Rules of Procedure
of the Federal Ministries.

F. Administrative costs

(a) Companies

The proposed act will not introduce, amend or abolish any
obligations on companies to disclose information.

(b) The general public

Two obligations on the general public to disclose information are
to be abolished. The repeal of section 33a of the Income Tax Act
(Einkommensteuergesetz) means that the obligations it imposes
to provide evidence of age, illness and degree of disability or
infirmity will no longer apply. The repeal of the latter part of the
first sentence of section 35a(2) of the same Act will remove the
burden of proof imposed by that provision.

The amendments to Books II and XII of the German Social Code
will introduce an obligation to disclose information in the
exceptional cases referred to in the third sentence of section 24a
of Book II and in the second sentence of section 28a of Book XII.

(c) Administrative authorities

The proposed act will not introduce, amend or abolish any
obligations on administrative authorities to disclose information.

The Federal Government bill printed above is already in the form of a Bundestag printed paper: the number 16 in the top right-hand corner to the left of the oblique stroke indicates the 16th electoral term, i.e. the period between the first sitting of the Bundestag elected in September 2005 and the first sitting of the 17th Bundestag, elected on 27 September 2009, whereas the number to the right of the oblique stroke is the number of the Bundestag printed paper concerned. The Bundestag does not receive the draft in this form; it is at the Bundestag that it is put into this form, printed and distributed to all Members.