Organic Law 2/2012, of 27 April, on Budgetary Stability and Financial Sustainability, establishes that Local Entities with a surplus or a positive cash surplus (remanente de tesorería), and which have not exceeded their authorised debt limits, may allocate their budgetary surpluses to investments related to sustainable actions.
Investments in the following programme groups are considered sustainable: sewerage, domestic supply of drinking water, collection, elimination and treatment of waste, public lighting, protection and improvement of the environment, improvement of agricultural structures and production systems, industry, energy, commerce, tourist information and promotion, passenger transport, transport infrastructure, water resources, scientific, technical and applied research, the information society, knowledge management, security and public order, traffic and parking management, civil protection, fire prevention and extinguishing services, public roads, parks and gardens, primary social care, creation of pre-school and primary education centres, operation of pre-school, primary and special education centres, libraries and archives, cultural facilities and museums, protection of historical-artistic heritage, sports facilities, roads, local roads and heritage management, which may include those applied to the rehabilitation, repair and improvement of infrastructure and buildings owned by the local entity and allocated to the public service, including infrastructure adaptation works that enable universal accessibility for people with disabilities and the elderly.
Excluded are both investments with a useful life of less than five years and those relating to furniture and fittings, unless they are used for the provision of services associated with the programme groups described above. Also excluded are investments in vehicles, unless they are used for the provision of the public services of waste collection, elimination and treatment, security and public order, civil protection, fire prevention and extinguishing, and passenger transport.
The IFS were in force between 2014 and 2020. Local Authorities have been given the option again to make financially sustainable investments from 2025 onwards. By virtue of Royal Decree-Law 15/2025, of 2 December, Local Entities have again been enabled to carry out financially sustainable investments in the 2025, 2026 and 2027 financial years.