Subscribe to a Global-Regulation Premium Membership Today!

FEDERAL REVIEW OF FISCAL RESPONSIBILITY AND GOOD PRACTICES

Law 27428

Modification. Act No. 25.917.


ARTICLE 1. Replace article 2 of Act 25,917 with the following:

Article 2: The National Government shall, before 31 August of each year, submit to the Federal Fiscal Responsibility Council established by this Act the macro-physical framework for the following exercise, which shall include:

(a) Expected results — primary and financial results — accrued for the public sector at each level of government.

(b) The projections of resources of national origin detailing their distribution by regime and by province and Autonomous City of Buenos Aires.

(c) The wage and tax policy you expect to implement and the projections of the following variables: prices, gross domestic product and nominal exchange rate. The consumer price index must have national coverage published by the National Institute of Statistics and Censuses.

ARTICLE 2. Replace article 3 of Act 25,917 with the following:

Article 3: The general budget laws of the provincial administrations, the Autonomous City of Buenos Aires and the National Civil Service shall contain the authorization of all expenses and the forecasting of all resources, of a regular and extraordinary nature, affected or not, of all centralized, decentralized agencies, social security institutions and financial flows of trust funds. They will also report on the forecasts for all auto-archic entities, institutes, enterprises and corporations of the State of the Non-Financial Public Sector. Resources and expenditures shall be in full amounts, without compensation. The provisions of this article do not imply altering the special laws regarding their distribution or intangibility mechanisms, in which case they will not be subject to the general rules of budget execution.

ARTICLE 3. Replace Article 6 of Law 25.917 with the following:

Article 6: Within the ninety (90) days of submission of the budget, the Provincial Governments and the Autonomous City of Buenos Aires will present to their legislatures, on a non-binding basis, the projections of the multi-year budgets for the next triennium, containing at least the following information:

(a) Projections of resources per heading;

(b) Cost projections for purposes, functions and by economic nature;

(c) Investment programme for the period, reporting on new and ongoing projects;

(d) Projection of participation in municipalities;

(e) Programme of credit operations and planned disbursements from multilateral agencies;

(f) Debt stock and public debt maturity profile;

(g) General criteria for the collection of other sources of financing; and

(h) Description of budgetary policies that support the projected economic and financial results and projections.

ARTICLE 4. Replace Article 7 of Law 25.917 with the following:

Article 7: Each province, the Autonomous City of Buenos Aires and the national government will publish on their website the Annual Budget — once approved, or in default, the extended budget, until it is approved — and the projections of the Multi-year Budget, after submitted to the corresponding legislatures, and the Annual Investment Account. With a withdrawal of UN (1) quarter, they will disseminate quarterly information on the budget execution (access and cash base), of the expenditure (accessed) classified according to purpose and function, of the stock of public debt, including the floating one, as well as the multilateral financing programmes, and of the payment of services, detailing in these three (3) last cases the type of creditor. To this end, and with the aim of contributing to the conduct of fiscal statistics in line with those established by international standards, methodological criteria will be used consistent with those set out in Act No. 24,156 and amendments, through the application of the budgetary classifications referred to in Article 4. Information will also be provided on the level of occupation of the public sector as at 31 December and as at 30 June each year with a withdrawal of UN (1) trimester, totalling the permanent and temporary staff plant and contracted personnel, including projects funded by multilateral credit agencies. The above detailed information should be forwarded to the FEDERAL COUNCIL of FISCAL RESPONSIBILITY, to the MINISTERY of the INTERIOR and to the MINISTERY of ECONOMY, the latter having to publish it on its website.

(Article replaced by art. 22 of the Act No. 27,591 B.O. 14/12/2020)

ARTICLE 5. Replace article 8 of Act 25,917 with the following:

Article 8: The Provincial Governments of the Autonomous City of Buenos Aires and the National Government shall calculate homogeneous parameters and indicators of public management that measure the efficiency and effectiveness of collection and efficiency in public expenditure. These indicators should be approved by the Federal Fiscal Liability Council and their measurement should be published in accordance with Article 7.

ARTICLE 6. Replace article 9 of Act 25,917 with the following:

Article 9: The Provincial and Autonomous City governments of Buenos Aires will implement an integrated financial management system, compatible with the national. The provincial governments, the Autonomous City of Buenos Aires and the national government will modernize their financial administration, human resources administration, debt and tax administration systems for the appropriate jurisdictions.

ARTICLE 7. Replace article 10 of Act 25,917 with the following:

Article 10: The nominal rate of increase in the national, provincial and Autonomous City of Buenos Aires ' net primary public expenditure shall not exceed the rate of increase in the national coverage consumer price index provided for in the macro-fiscal framework mentioned in Article 2 (c). This rule shall be applied for the budget and performance phase (base accrued).

With respect to the provinces and the Autonomous City of Buenos Aires, the net current public expenditure will be understood as the primary current graduates excluded:

(a) Expenditures financed from loans from international agencies;

(b) Transfers by participation to municipalities and communes;

(c) Current expenditures financed from non-automatic contributions transferred by the national Government to jurisdictions that have a specific erogation;

(d) Current expenditures for the implementation of national public policies, which are defined as State policies by future national laws.

In addition, and only in those jurisdictions that in the year prior to their evaluation have implemented the budget (base accrued) with a positive financial result, the operating expenses associated with new infrastructure investments in the areas of education, health and safety will be deducted. In respect of the Nation, net primary public expenditure will be understood as the primary current revenues excluded from the borrowing increases resulting from the application of law 26.417.

ARTICLE 8. Incorporate as article 10 bis of Law 25,917, the following:

Article 10 bis: For the national Government and for those jurisdictions that in the previous year present budgetary executions (base accrued) with a primary current result deficit or fail to comply with the indicator provided for in article 21, the nominal rate of increase in net primary public expenditure may not exceed the rate of increase in the national coverage consumer price index provided for in the macro-physical framework referred to in article 2°, subparagraph (c).

For this purpose, net primary public expenditure shall exclude:

(a) Current expenditures detailed in the second paragraph of the previous article;

(b) Capital expenditures financed from affected resources whatever their source of financing; and

(c) Capital expenditures for the implementation of national public policies defined by future national laws as a State policy.

ARTICLE 9 Incorporate as article 10 ter of law 25,917, the following:

Article 10 ter: From the fiscal year 2020, the two previous articles will be exempted from the performance of the budget (base accrued) with a balanced or supervietary financial result in the year prior to the relevant assessment of the evolution of the expenditure.

With the balanced financial result achieved, the nominal rate of increase in primary current expenditure cannot exceed the nominal growth rate of the Gross Domestic Product defined in the macro-physical framework mentioned in Article 2 (c). Where the nominal rate of variation of the Gross Domestic Product is negative, primary current expenditure may at most grow as the national coverage consumer price index provided for in the macro-fiscal framework referred to in Article 2 (c).

ARTICLE 10. Incorporate as article 10 of the Law 25,917, the following:

Article 10 quater: The National Government, the Provincial Governments and the Autonomous City of Buenos Aires undertake not to increase the ratio of charges occupied in the Public Sector (on permanent, temporary and contracted) existing as at 31 December 2017 with respect to the population projected by the INDEC for each jurisdiction. Compliance with this obligation shall be considered by the Federal Council for Fiscal Responsibility at the time of undertaking the evaluation of article 10 bis.

jurisdictions that have achieved a surplus or balanced financial outcome may increase the staff plant associated with new investments that involve increased provision of social services, such as education, health and safety.

From the fiscal year 2018 the Federal Fiscal Responsibility Council will determine the optimal ratio of occupied charges (permanent, temporary and contracted) appropriate to the characteristics of each jurisdiction, in order to allow exceptions.

ARTICLE 11. Replace article 12 of Act 25,917 with the following:

Article 12: The sale of fixed assets shall be used to finance capital erogations.

ARTICLE 12. Incorporate as article 15 bis of Law 25,917, the following:

Article 15 bis: In addition to the provisions of this law, during the two (2) final quarters of the year of end of term, no increases in current expenditure of a permanent nature may be made except:

(a) Those who transcend Government management, which are defined in this normative nature, and should be specifically addressed; and

(b) Those whose originating cause exists prior to the specified period and its compliance is mandatory.

During that period, any exceptional legal or administrative provision involving the donation or sale of fixed assets shall be prohibited.

For the purposes of the application of this article, it shall be understood by increases in current expenditure of a permanent nature, to those expenses that extend for more than six (6) months and which are not based on social emergencies or natural disasters.

ARTICLE 13. Incorporate as article 18 bis of Law 25,917, the following:

Article 18 bis: The National Government, the Provincial Governments and the Autonomous City of Buenos Aires will agree on the adoption of tax policies, aimed at harmonizing and not increasing the legal tax pressure, especially in those levies on labour, production, the productive sector and its financing, with the common purpose of achieving the growth of the national economy and regional economies, to the extent that such decisions do not involve compromising the sustainability of public finances. To this end, the Federal Fiscal Responsibility Council will publish the tax legal pressure annually by area of activity.

ARTICLE 14. Replace article 19 of Law 25,917 with the following:

Article 19: For the purposes of the use in the indicators provided for in Article 8, the Provincial Governments and the Autonomous City of Buenos Aires shall take the necessary measures to incorporate the calculation of the gross product (GDP) with methodologies compatible with the National Institute of Statistics and Censuses (INDEC), until this agency has the updated calculation.

ARTICLE 15. Replace article 21 of Law 25,917 with the following:

Article 21: The Provincial Governments and the Autonomous City of Buenos Aires shall take the necessary measures to ensure that the level of indebtedness of their jurisdictions is such that in no fiscal year the services of the instrumented debt exceed fifteen percent (15%) of the net current resources of transfers per share in municipalities.

The Provincial Governments and the Autonomous City of Buenos Aires undertake not to issue substitute titles for the national currency of legal course throughout the country.

ARTICLE 16. Replace article 22 of Act 25,917 with the following:

Article 22: Those jurisdictions that exceed the percentage referred to in the previous article shall not be able to access a new indebtedness, except as a refinancing of the existing one and to the extent that such refinancing results in an improvement in the agreed terms of the applicable amount or time limit or interest rate, and/or funding from Multilateral Credit Agencies, or loans with similar repayment/devolution characteristics, and of national programmes,

ARTICLE 17. Replace article 25 of Law 25,917 with the following:

Article 25: The Provincial Governments, the Autonomous City of Buenos Aires and the municipalities, to access indebtedness operations with agencies that do not belong to the Non-Financial Public Sector, shall raise the background and documentation for the national Government, which shall carry out an analysis in order to authorize such operations in accordance with the guidelines contained in the macro-physical framework referred to in article 2 and being a necessary condition for the authorization of the present law.

The Federal Fiscal Responsibility Council shall make available to the national Government the status of compliance with each jurisdiction.

The provincial governments, the Autonomous City of Buenos Aires and the municipalities will be able to access indebtedness operations from programs with financing from Multilateral Credit Agencies and national programs, provided that the Federal Fiscal Responsibility Council does not report non-compliance with the principles and parameters of this law.

The national government will implement a differentiated treatment for the analysis of the operations of restructuring and repayment of the debt of the current budget.

The national Government shall set the procedures and time limits for the authorization of debt operations.

ARTICLE 18. Incorporate as article 31 bis of Law 25,917, the following:

Article 31 bis: The jurisdictions that have executed a budget (base accrued) with a balanced or supervitory financial result in the two (2) prior periods, in the face of sufficiently well-founded particular situations, may process exceptions to the Federal Council of Fiscal Responsibility.

ARTICLE 19. Replace article 32 of Law 25,917 with the following:

Article 32: Failure to comply with the obligations set forth in this Act shall result in sanctions which, without prejudice to other penalties which the Federal Council of Fiscal Responsibility may establish for this purpose, may consist of:

(a) Dissemination of the situation in all the web pages of the provinces, the Autonomous City of Buenos Aires and the national Government, in a special section created for this purpose;

(b) Restriction of the right to vote in the Federal Fiscal Liability Council;

(c) Limitation on the granting of guarantees and guarantees by the national Government; and

(d) Limitation of the national Government ' s budgetary transfers to jurisdictions that are not originated in co-participable national automatic transfer taxes.

ARTICLE 20. Replace article 33 of Law 25,917 with the following:

Article 33: The Provincial Governments shall invite their municipalities to accede to the present law, propose to them the application of the established principles, promote the development of fiscal information of the same with the methodological criteria mentioned in Article 7°, coordinate their correct dissemination and report on everything related to the Federal Regime of Fiscal Responsibility, with the technical assistance and support of the Federal Council of Fiscal Responsibility.

ARTICLE 21. Replace article 34 of Act 25,917 with the following:

Art. 34: Invite the provinces and the Autonomous City of Buenos Aires to adhere to the Federal Regime of Fiscal Responsibility established by this law. Adhering jurisdictions shall notify the Federal Council of Fiscal Responsibility of the respective policy instrument of accession.

ARTICLE 22. Replace the heading of Chapter II “Public Gazette” of Law 25,917, with the following: “Quantitative Rules”.

ARTICLE 23. The last paragraph of article 15, article 24 and article 36 of law 25,917, and the names “Chapter III Public Income”, “Chapter IV Financial Balance”, “Chapter V Indebtedness” and “Chapter VIII Transitional Provisions”.

ARTICLE 24. Renumber Chapters VI and VII as Chapters III and IV of Law 25,917.

ARTICLE 25. Amendments to the Federal Regime of Fiscal Responsibility set forth in this Act shall enter into force on 1 January 2018. For those jurisdictions that adhere subsequently, the validity will begin to govern from the date of accession.

ARTICLE 26. Contact the national executive branch.

DADA IN THE SESSION OF THE ARGENTINE CONGRESS, IN GOOD AIRES, THE 21 DEC 2017


MARTA G. MICHETTI. - EMILIO MONZO. - Eugene Inchausti. — Juan P. Tunessi.