I. DEFINITION OF TERMS
II. FINANCING OF FACTIONS
Every Faction is entitled to financing of:
A faction which has received more than one per cent (1%) of the valid votes cast in the Knesset election but has not received enough votes to have won a Knesset seat is entitled to one (1) "Financing Unit" to cover its election expenses.
The funds for financing will be disbursed by the Treasury, through the Speaker of the Knesset, into the bank accounts of the Factions.
In the case of runoff elections for the Prime Minister under article 13 of Basic Law: The Government, each of the Factions or Lists of Candidates which are identified with the two candidates for Prime Minister will be eligible for an extra sum (to cover election expenses) in the amount equal to eight (8) Financing Units.
Financing for election expenses incurred by a New Faction, as set forth under article 16, shall be set at one (1) Financing Unit per each member of Knesset elected on its list plus an additional sum equal to one (1) Financing Unit.
A Faction shall be entitled to receive financing at the rate of one (1) Financing Unit per mandate won in the previous Knesset elections coupled with one (1) Financing Unit per mandate won in the current Knesset elections, divided by two (2), plus one (1) additional Financing Unit.
Ongoing expenses of each Faction shall be funded at the rate of five percent (5%) of a Financing Unit per month per Member of the Knesset in the Faction.
A Faction which has presented the Speaker of the Knesset with certification by the Chairman of the Central Election Commission that it has presented a list of candidates for the next Knesset election shall receive an advance payment for its election expenses; this advance shall be sixty per cent (60%) of each Financing Unit per member of the Knesset listed as a Faction member on the day which the list of candidates was presented.
Each Faction shall appoint an accountant who will be responsible for auditing the Faction's accounts, preparing financial reports.
The State Comptroller shall have the right to determine guidelines, for the accountants of the Factions, regarding the manner in which accounts of the Factions and Lists of Candidates shall be audited.
A Faction or a List of Candidates may not receive a loan, except from a banking institution.
A Faction may not receive any funding whatsoever from a commercial entity, corporation or business partnership.
No faction may receive a contribution, directly or indirectly, from an individual (i.e. a noncommercial entity), in excess of the sum of five hundred (500) NIS from any person or his dependents. In an election year, for either the Knesset or the Local Authorities, this sum shall be one thousand (1,000) NIS. (These sums are linked to the Consumer Price Index.)
A List of Candidates shall not expend more than ten (10) Financing Units for election expenses.
A Faction comprising five (5) Members of the Knesset or less shall not expend more than ten (10) Financing Units for election expenses.
A Faction comprising more than (5) five Members of the Knesset but less than ten (10) Members of the Knesset shall not expend more than twice the number of Financing Units per Member of Knesset in the Faction.
A Faction comprising ten (10) or more Members of the Knesset shall not expend more than twice the the number of Financing Units per the first ten Members of the Knesset in the Faction and one and one half (1 1/2) the number of Financing Units per each additional Knesset Member.
In the course of a calendar year no Faction may expend for ongoing expenses an amount equal to more than one and three fifths (1 3/5) of the sum to which it is entitled to receive (via funding by the Treasury).
A Faction or List of Candidates may not receive a financial contribution from someone who is not eligible to vote in the elections.
Every Faction shall submit to the Speaker of the Knesset its yearly balance sheet and its yearly report of income and expenditures. These documents shall be open to public examination in the manner which will be determined by the Speaker.
Funds received by a Faction according to a decision by the General Federation of Labor in order to fund election campaigns within the Federation or one of its constituent unions shall not be deemed a violation of this law.
Sources: Israeli Foreign Ministry