Provisional Measure No. 1,985-34, Of 23 November 2000

Original Language Title: Medida Provisória nº 1.985-34, de 23 de Novembro de 2000

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PROVISIONAL MEASURE N. 1.985-34? FROM November 23, 2000

Provides on financial operations between the National Treasury and the entities it mentions, and gives other arrangements.

The President of the Republic, in the use of the assignment that confers him on art. 62 of the Constitution, adopts the following Interim Measure, with force of law:

Art. 1º Is the Union authorized to issue, in the form of direct placement, in favor of the National Economic and Social Development Bank? BNDES, securities of the Federal Mobiliary Public Debt, whose characteristics will be defined by the Minister of State of the Farm.

§ 1º In return for the securities issued in the form of this article, BNDES may use, at the discretion of the Minister of State of the Farm and except for the incisos II and III of this paragraph, by the present value:

I? securitized claims of issuance of the National Treasury, registered with the Central Custody And Financial Settlement of Securities? CETIP, for its present value, to be defined by the Secretary of the National Treasury of the Ministry of Finance ;

II? credits held against the Binational Itaipu or against BNDESPAR? BNDES Holdings S.A.;

III? Notes from the National Treasury, Series P? NTN-P;

IV? claims held against the Union as a result of:

a) refinancing contracts concluded on the basis of Law No. 8,727 of November 5, 1993, together with BNDES ;

b) contract of purchase and sale of shares of Brazilian Siderurgy S.A. ? SIDERBRAS between the Union and BNDESPAR ;

c) assumption, by the Union, of debits from the Federal Railway Network S.A. ? RFFSA, together with BNDES, pursuant to the provisions of this Provisional Measure ;

d) claims relating to lease or public service concession contracts entered into under the National Desestatization Program? PND ;

e) obligations arising from price equalization regarding the agricultural securitization process of which it treats Law No. 9,138 of November 29, 1995.

§ 2º In the assumption of use of the claims referred to in incision II of the preceding paragraph, the Union shall be assured minimum monthly remuneration equivalent to that of the National Treasury Single Account with the Central Bank of Brazil, to be pays for BNDES, on the last business day of each month.

§ 3º The BNDES may repurchase from the Union, at any time, the claims referred to in the inciso Il of § 1º, admitting to donation in payment of goods and rights of its property, observed the provisions of the inciso I of § 1º, in fine.

Art. 2º The goods and rights received by the Union under § 3ºdo Previous article may be the subject of exchange with goods and rights of entities included in the PND or, observed relevant legislation, be used for capital increase in the referred to entities.

Art. 3º Will be fully used for amortization of the Federal Public Debt the payments made:

I? by Itaipu Binacional and BNDESPAR, relating to the credits received from BNDES ;

Il? by the relative BNDES:

a) to the fulfilment of the provisions of § 2º of the art. 1º;

(b) to the repurchase operation provided for in § 3º of art.1º, when in kind.

Art. 4º It shall be the National Development Fund authorized to pay, at the sole discretion of the Ministry of Finance, Obligations of the National Development Fund titled by the union, with shareholdings of its property, deposited in the National Disestatization Fund? FND, of which you will be unbound at the time of transfer.

Art. 5º It shall be the Union authorized to exchange shareholdings of its property by shareholdings held by BNDESPAR, provided that the operation does not affect the Union's shareholder control in the companies involved in the exchange.

Art. 6º The price of the shareholdings to be permuted in the form of the preceding articles may not be higher, in the case of open society, at the average quotation verified in the week preceding the washbasin of the exchange instrument or, in the case of shares without quotation in Stock Grants, to the constant heritage value of the last balance sheet or special balance sheet.

Art. 7º The operations of which they deal with the previous articles, excluding those provided for in art. 4º, they will not be able to exceed, together, the limit of R$ 10,000,000,000.00 (ten billion reais).

Art. 8º It is the Union authorized to refinance the operation that it treats art. 8º of Law No. 9,639 of May 25, 1998, observed the following conditions:

I? term: ten years ;

ll? payment: in single installment, at the end of ten years counted from the date of the conclusion of the refinancing contract ;

III? monetary update: updated and debited monthly based on the variation in the General Price Index? Internal Availability (IGP-DI), calculated by the Getúlio Vargas Foundation, or other index that comes to replace it.

§ 1º The INSS is allowed to offer floating guarantee to the refinancing operation of which it treats this article, represented by assets and rights integral to its asset, in particular credits against municipalities, foundations and companies federal public and entities whose shares have been deposited in the FND, to be defined jointly by the Finance and Social Welfare and Social Welfare Ministries.

§ 2º In the operation that it treats this article, may the Union, at the discretion of the Minister of State of the Finance, for partial amortization or settlement of the debt, receive in payment goods and rights integral to the asset of the INSS, responding to the INSS, in the case of claims against third parties, the existence of the credit and the debtor's solvency.

§ 3º Could the INSS be constituted representative of the Union for the receipt of the credits given in payment.

§ 4º Federal authorities and foundations will be able to pay the obligations transferred to the Union, as a result of the provisions of § 2º, with assets and rights integral to their assets, by staying the Union alternatively authorized to promote, the sole discretion of the Minister of State of the Farm, the low or partial loan of the credit, if necessary to maintain the financial health of the institution.

§ 5º Federal public undertakings and entities whose shares have been deposited in the FND may, at the sole discretion of the Minister of State of the Farm, pay the obligations transferred to the Union, as a result of the provisions of § 2º, with securitized credits, Securities of the Agrarian Debt registered with CETIP or claims arising from lease or public service concession contracts concluded under the PND, kept, at the very least, when it is the case, the equivalence economic of reciprocal credits.

§ 6º The Union may use its claims arising from the credit operation of which it treats this article for capital increase of the respective debtor entity.

Art. 9º The Union is authorized, at the discretion of the Minister of State of the Farm, up to the limit of R$ 19,000,000,000.00 (nineteen billion reais), to:

l? acquire credits that the Brazilian Electrical Stations S.A. ? ELECTROBRÁS detain against the Binational Itaipu, referring to the refinancing contracts concluded on September 2, 1997, and may use in payment:

a) integral assets and rights of the Global Reversion Reservation? RGR that it deals with Law No. 5,655 of May 20, 1971 ;

b) resources raised by way of payment for the use of public good that it treats art. 7º of Law No. 9,648 of May 27, 1998 ;

c) securities of the Federal Mobiliary Public Debt, whose characteristics will be defined in act of the Minister of State of the Farm ;

II? receive the credits of which it treats the inciso I of this article, in daction in payment of Union credits arising:

a) of the external debt refinancing due by ELECTROBRÁS and by companies of the ELECTROBRÁS system ;

b) of participation in the social capital of ELECTROBRÁS ;

c) of other obligations of ELECTROBRÁS and of companies of the ELECTROBRÁS system.

§ 1º The operations of which this article is concerned shall be by the present value of the credits and obligations in them involved.

§ 2º The claims acquired by the Union pursuant to the caput of this article may be transferred to BNDES, upon disposal or exchange for goods and rights.

Art. 10. It is the Union authorized to take over the obligations of the Federal Railway Network S.A. ? RFFSA, represented by the debtor balances of financing contracts together with BNDES, up to the amount of R$ 210,000,000.00 (two hundred and ten million reais).

§ 1º The obligations to be referred to the caput will be subject to audit by the Federal Office of Control of the Ministry of Finance.

§ 2º Case there has already been the assumption, eventual difference found by the Federal Office of Control will be paid to the Union, in kind or in goods, by the RFFSA within thirty days.

§ 3º It shall be the Union authorized to issue securities of the Federal Public Debt in payment of the obligations to which the caput refers or to securitize the obligations assumed, in both cases with characteristics to be defined in act of the Minister of State of the Farm.

Art. 11. In return for the assumption of the debts of which the previous article is concerned, the RFFSA shall transfer to the Union, by the face value, claims relating to tenancy or public service concession contracts entered into under the PND.

Art. 12. It is authorized to meet accounts between the BNDES credits to which the art caput refers. 10 and claims held by the Union against BNDES, including those transferred to the Union under this Provisional Measure.

Art. 13. It is the Union authorized to acquire RFFSA claims relating to tenancy or public service concession contracts concluded under the PND, by face value, up to the limit of R$ 2,097,956,000.00 (two billion, ninety and seven million, nine hundred and fifty-thousand real ones), utilizing in payment, up to the amount of R$ 1,789,956,000.00 (one billion, seven hundred and eighty-nine million, nine hundred and fifty thousand real), Treasury Financial Letters? LFT, and, up to the amount of R$ 308,000,000.00 (three hundred and eight million reais), certificates issued by the National Treasury.

§ 1º The characteristics of the Treasury Financial Letters? LFT and of the certificates to be issued in fulfillment of the willing on the caput will be defined in act of the Minister of State of the Farm.

§ 2º For the purpose of the formalization of the contract with the Union for the purpose of carrying out the operation referred to in the caput of this article, they do not apply to the RFFSA, in liquidation, the requirements and legal impediments in respect of the proving of adhesion with organs or entities of the direct or indirect Federal Public Administration, except with the social follow-on system.

Art. 14. It is the Union authorized to receive the certificates of which it treats the previous article in full or partial payment of the public debt of responsibility of the States and the Federal District before the Union, concerning contracts awarded to the ampairing of the Act paragraph 9,496 of September 11, 1997, and of the Provisional Measure No. 2.044-58, of this date.

Single Paragraph. The application of the provisions in the caput will observe the following criteria:

I? fifty per cent on the flow of the refinancing instalments and for amortization of the debtor balance of the graphic account ;

II? fifty per cent on total debt stock.

Art. 15. Is the Union authorized to acquire credits from the Docas Company of Rio de Janeiro? CDRJ, relating to lease or public service concession contracts concluded under the PND using in payment Financial Letters of the Treasury? LFT:

I? by the face value, up to the limit of R$ 162,000,000.00 percent (one hundred and sixty-two million reais) ;

II? by economic equivalence, up to the limit of R$ 80,000,000.00 (eighty million reais).

Single Paragraph. The characteristics of the Treasury Financial Letters? LFT to be issued in fulfillment of the provisions of this article, as well as the conditions of the operation, will be defined in act of the Minister of State of the Farm.

Art. 16. The Union shall be authorized, until December 31, 2000, to acquire from the States and the Federal District credits relating to the mandatory government participation in the modalities of royalties, special holdings and financial compensation, relating to the exploration of water resources for the purposes of electrical energy, oil and natural gas.

§ 1º The authorization that treats the caput is limited to the value properly designed by the National Petroleum Agency? ANP or the National Electrical Energy Agency? ANEEL, as per the case, discounted any and any binding budget or transfer.

§ 2º Will be the object of acquisition only the values distributed through the regulatory agencies mentioned in the preceding paragraph.

§ 3º The Union will use in payment Treasury Financial Certificates? CFT with defined characteristics in act of the Minister of State of the Farm.

§ 4º The CFT received by the Federation Units, due to the operation of which it treats the caput, will necessarily be used in the payment of debts to the Union and its entities or in the capitalization of the funds of foresight, at the discretion of the Minister of State for Finance.

§ 5º The acquisition of which treats the caput can only be carried out once in relation to each state and the Federal District.

Art. 17. It is the Union authorized to register, in centralized custody system, receivable acquired in the form of the law, which may be securitized for the purpose of transfer to third parties.

Single Paragraph. The divestant entities of the caput's object credits will qualify, along with the centralized custodial system, as register of the assets in favor of the Union.

Art. 18. The resources in kind received by the Union in accordance with the provisions of the arts. 9º to 16 of this Provisional Measure should be used in full in the amortization of Federal Public Debt.

Art. 19. The debtor balance of the Oil, Derivatives and Alcohol Account, instituted by Law No. 4,452 of November 5, 1964, includes monthly remuneration, calculated:

I? for the period from 1º January 1992 a to June 30, 1996, based on the index of the Tax Unit of Reference ;

II? from 1º July 1996, by the monthly application of the Referential Rate? TR, released by the Central Bank of Brazil.

Art. 20. Is the Union authorized to issue, in favor of Brazilian Petroleum S.A. ? PETROBRÁS, securities of Federal Public Debt, whose characteristics will be defined by the Minister of State for Finance, with the purpose of ensuring the payment of eventual debtor balance of the Petroleum Account, Derivatives and Alcohol, Existing in June 30, 2003.

§ 1º The total value of the securities to which the caput refers is limited to R$ 5,819,364,988.37 (five billion, eight hundred and nineteen million, three hundred and sixty-four thousand, nine hundred and eighty-eight real and thirty-seven cents), equivalent to the debtor balance of the Oil, Derivatives and Alcohol Account on June 30, 1998.

§ 2º The warranty will be adjusted monthly, depending on the reduction in the Account debtor balance.

Art. 21. It is the Union authorized to settle the debtor balance of the Oil, Derivatives and Alcohol Account upon debt securitization, under the terms defined by the Minister of State of the Farm, in this case, by automatically cancelling the securities issued in warranty in the form of the art. 20.

Art. 22. The debtor balance of the Oil, Derivatives and Alcohol Account, on June 30, 1998, will be the subject of audit by the Federal Office of Control, from the values already approved by the extinct National Department of Fuels, relatively to the period prior to 1º April 1992.

Single Paragraph. Completed the audit, the amount of the securities used in warranty under the art. 20, or of the securitized credits in the form of art. 21, will be adjusted to the new ascertained value.

Art. 23. Eventual creditor balance of the Oil, Derivatives and Alcohol Account will be collected monthly to the Single Account of the National Treasury.

Art. 24. It is the Union authorized, at the discretion of the Ministry of Finance, to promote accounts between the debtor balance of the Oil, Derivatives and Alcohol Account and Obligations of PETROBRÁS to the Union, including of a tax nature.

Art. 25. Is the Union authorized to securitize, under conditions to be defined by the Minister of State of the Farm, the following debts with the Federal Economic Box? CEF:

I? the debtor balance of the financing contracts concluded between the extinction National Housing Bank? BNH and the National Department of Works and Sanitation? DNOS, up to the amount of R$ 396,000,000.00 (three hundred and ninety and six million reais), position of October 30, 1998 ;

II? the reel value, at least, by the Union, to the CEF, as the successor of the BNH, in respect of the bonds granted under Decree-Law No. 2,164 of September 19, 1984, up to the amount of R$ 72,200,000.00 (seventy-two million and two hundred thousand reais), position of November 30, 1998.

§ 1º The Ministry of Finance, through the Federal Office of Control, will issue the correctness of the values concerning the obligations of which this article is concerned.

§ 2º The securitization contracts should contain prediction that the eventual difference arising from the aferition of which it treats the preceding paragraph:

I? if in favor of the CEF, it will be the subject of new securitization, under the conditions defined by the Minister of State of the Finance ;

II? if in favor of the Union, will it be debited to the account of " Banking reservations? of the CEF, through the intermediary of the Central Bank of Brazil, upon prior notification to the financial institution, with the subsequent transfer to the National Treasury of the corresponding value, which is to be used in full in the amortization of Debt Federal Mobiliary Public.

Art. 26. Is the Union authorized to hold itself accountable, before the CEF, for the obligations arising from the migration of the participants of the Employees Welfare Association of the extinct BNH? PREVHAB, for the Foundation of the Federal Economiaries? FUNCEF or to the National Insurance Company General? SASSE, up to the amount of R$ 1,136,000,000.00 (one billion, one hundred and thirty six million reais), position of November 30, 1998, including upon securitization, under conditions to be defined by the Minister of State of the Farm.

§ 1º The transfer to the Union of the assets ceded to the CEF will be given to the end of the migration process, referring to the individual reservations of the PREVHAB participants who have joined the Regulation of Benefits Plans? REPLAN of the Foundation of Federal Economiaries? FUNCEF or have opted for the Special Benefits Plan instituted by the CEF together with the National Insurance Company? SASSE.

§ 2º The approval of the amount referred to in the caput of this article shall be effected after the securitization of the obligations, upon opinions to be drawn up by at least two notorious companies specialization in actuarial counsel, the be contracted by the CEF, whose completion should be compulsorily confirmed by the Supplementary Pension Secretary of the Ministry of Social Welfare and Social Welfare and by the Private Insurance Superintendency of the Ministry of Finance, in the scope of their respective competences.

§ 3º The securitization contracts shall contain a forecast that the eventual difference arising from the type-approval of the preceding paragraph shall occur pursuant to § 2º of the preceding Article.

§ 4º Once all the obligations of the benefits plans mentioned in § 1º are fulfilled, the resources perhaps remaining will be reversed to the National Treasury.

Art. 27. It is the Union authorized to issue, in the form of direct allotment, in favor of the CEF, up to the limit of R$ 13,000,000,000.00 (thirteen billion reais), securities of the Federal Mobiliary Public Debt, whose characteristics will be defined by the Minister of State of the Farm.

Single Paragraph. In return for securities issued in the form of the caput, the CEF may use credits arising from contracts concluded on the basis of Law No. 8,727 of November 5, 1993.

Art. 28. Is the INSS authorized to receive, from Union integral capital company, Treasury Financial Certificates? CFT, for face value, in dation in payment of previdential debits, existing until December 31, 1999, up to the limit of R$ 1,100,000,000.00 (one billion and one hundred million reais), position of May 31, 2000, and which will come to be recognized by the debtor company.

Single Paragraph. The certificates referred to in this article may be rescued in advance by the National Treasury, by the face value, upon request of the INSS.

Art. 29. It is the Union authorized to take over and securitize, up to the amount of R$ 250,000,000.00 (two hundred and fifty million reais), under conditions to be defined by the Minister of State for Finance, the financial obligations provided for in the contract of funding firmed, on September 24, 1996, between the Rio Docas Company of Rio de Janeiro and the BNDES with the aim of implementing the Magnification and Modernization Project of the Port of Sepetiba.

Single Paragraph. The Union credit, arising from the assumption provided for in the caput of this article, is to be settled with the binding of receivable from the Docas Company of Rio de Janeiro, in the hypothesis of anticipation of these, or with future increases in its capital.

Art. 30. The arts. 1º and 6º of Law No. 9,364 of December 16, 1996, pass vigorously with the following essay:

?Art. 1º ....................................................................................................................................................

§ 1º The debits referred to in this article shall be the subject of audit by the Federal Office of Control of the Ministry of Finance.

§ 2º The amount set in the inciso ll of this article will be updated, up to the date of the effective payment, by the variation in the General Price Index? Internal Availability? IGP-Dl, plus interest of six per cent per year.? (NR)

?Art. 6º The liquidation of the debits referred to in the inciso II of the art. 1º of this Act will be given by means of seturized claims of responsibility of the National Treasury, with characteristics set out at the sole discretion of the Minister of State of the Farm.

Single Paragraph. REFER should give full, shallow and full discharge of all RFFSA bonds corresponding to the value mentioned in art. 1º, inciso II, of this Act, and must manifest desistance of all actions helped by debts of the RFFSA.? (NR)

Art. 31. Is the Union authorized to take over and securitize, up to the amount of R$ 80,000,000.00 (eighty million reais), under conditions to be defined by the Minister of State for Finance, the financial obligations of the Brazilian Material Industry of Brazil? IMBEL before the National Institute of Social Insurance -INSS.

Art. 32. It is the Union authorized to reimburse the Brazilian Electrical Stations S.A. -ELECTROBRÁS, up to the amount of R$ 8,861,000,000.00 (eight billion, eight hundred and sixty and one million reais), position on November 30, 1999, corresponding values:

I? at the surplus cost of generation of nucleoelectric power by Angra I, determined with respect to the cost of generating hydropower power per plant of similar capacity ;

II? to the complementary investments made in Angra I Usina, from 1º January 1985 ;

III? to expended, own resources, in the construction of the Angra II and III nucleoelectric power plants, until December 31, 1980 ;

IV? to the cost of construction cost of Angra II Usina, surplus this determined with respect to the cost of a hydropower plant of equal capacity of generation.

Art. 33. The refund provided for in the previous article will be effected by:

I? under-obligation of liability commitments from FURNAS? S.A. Electrical Plants, registered at the Office of the National Treasury, arising from the refinancing agreements of debts entered into by the Federative Republic of Brazil ;

II? securitization of the remaining balance, in the terms defined by the Minister of State of the Farm ; and

III? cancellation of credit the Union holds against FURNAS, in the quality of successor of the extinction Brazilian Nuclear Companies s.A. -NUCLEBRÁS, in the terms of art. 1º of Law No. 7,862 of October 30, 1989.

Art. 34. It lies ELECTROBRÁS authorized to acquire the stock control of the Amazon Energy Company-CEAM.

§ 1º For the purpose provided for in this article, ELECTROBRÁS will extend its participation in the social capital of CEAM by acquisition of common shares with a voting and preferential right belonging to the State of the Amazon, or upon company capital increase process, with the acquisition of the rights of preference in subscription of shares corresponding to the participation of the State.

§ 2º For the acquisition authorized in this article, ELECTROBRÁS will use resources from the Global Reversion Reserve Fund, pursuant to § 4º of the art. 4º of Law No. 5,655 of May 20, 1971, as amended by Law No. 8,631 of March 4, 1993, with the essay given by Law No. 9,496 of September 11, 1997.

Art. 35. Effective acquisition of stock control, in the manner provided for in the previous article, CEAM will be included in the PND, with ELECTROBRÁS implementing the economic character adjustments?financial, administrative and operational that if they are necessary for the privatization of the company, under the standards of Law No. 9,491 of September 9, 1997.

Art. 36. To the resources obtained with the disposal of the shareholding of ELECTROBRÁS at CEAM, do not apply the art devices. 13 of Law No. 9,491, 1997, and will be deposited in the Global Reversion Reservation Fund, up to the amount used for the acquisition authorized by art. 34.

Art. 37. It is ELECTROBRÁS authorized, within the framework of the PND, to promote the societal restructuring of its controlled, directly or indirectly-acting companies acting in the State of Amazonas, upon termination, merger, incorporation, capital reduction or constitution of integral subsidiaries, including the creation of new societies, with the aim of segregating the business activities of generation, transmission, distribution and marketing of electrical energy.

Art. 38. The arts. 12 and 13 of Law No. 3,890-A of April 25, 1961, amended by Law No. 4,400 of August 31, 1964, pass vigorously with the following essay:

?Art. 12 .....................................................................................................................................................

§ 1º The Board of Directors will be integrated by nine members, elected by the General Assembly, which will designate among them the President, all with a management deadline that may not be more than three years, admitted to re-election, thus constituted:

I? seven Councillors chosen from among Brazilians of notorious knowledge and experience, moral idoneity and illegal reputation, indicated by the Minister of State for Mines and Energy ;

II? a Councilor appointed by the Minister of State for Planning, Budget and Management, in the form of art. 61 of Law No. 9,649 of May 27, 1998 ;

III? a Councilor elected by the minority shareholders, physical and legal persons of private law.

§ 2º The President of ELECTROBRÁS will be chosen from among the members of the Board of Directors.

§ 3º The Board?Executive will compose himself from the President and the directors.

§ 4º The President and the directors will not be able to exercise direction, administration or consultancy functions in private economy companies, utilities of public power utility services, or linked private law firms in any way to the electrical sector, except in the subsidiaries, controlled and dealerships over control of the States in which ELECTROBRÁS has shareholding, where they will be able to exercise positions on the board of directors, observed the provisions of Law No. 9,292 of July 12, 1996 on the realization of remuneration.? (NR)

?Art. 13. The Fiscal Council, of permanent character, comprised of five members and their respective alternates, elected by the General Assembly Ordinary, all Brazilians and domiciled in the Country, observed the requirements and impediments set by the Companies Act by Shares, shareholders or not, of which one will be elected by the holders of the minority common shares and another by the holders of the preferred shares, in separate voting.

§ 1º DAmong the members of the Fiscal Council, one will be appointed by the Minister of State for Finance, as the representative of the National Treasury.

§ 2º In case of vacancy, resignation, impediment or unwarranted absence to two consecutive meetings, it shall be the member of the replaced Fiscal Board, until the termination of the mandate, by the respective supplier.

§ 3º The mandate of the members of the Fiscal Council is one year, allowed for re-election.? (NR)

Art. 39. It is the Union authorized to promote, through the Ministry of Finance, meeting of accounts of claims arising from operations effected with resources of the extinct Export Financing Fund-FINEX with obligations of the Credit Insurance to the Export-SCE, in value in real equivalents at US$ 893,414,735.32 (eight hundred and ninety and three million, four hundred and fourteen thousand, seven hundred and thirty-five dollars and thirty-two cents), ascertained by the Office of the National Treasury, by the Bank of Brazil S.A. and by the IRB Brasil Resinsurance S.A., position on November 30, 1997.

Art. 40. It is the Union authorized to acquire credits from the Docas Company of the State of São Paulo-CODESP relating to tenancy or public service concession contracts concluded under the UNDP, observed economic equivalence, using in payment Financial Letters of the Treasury-LFT, up to the limit of R$ 40,000,000.00 (forty million reais).

Single Paragraph. The characteristics of the Treasury-LFT Financial Letters to be issued in fulfillment of the provisions of the caput of this article, as well as the conditions of the operation, will be defined in act of the Minister of State of the Farm.

Art. 41. It is the Union authorized to acquire credits from the Docas Company of the Holy Spirit-CODESA relating to tenancy or public service concession contracts concluded under the PND, observed economic equivalence, using in payment Financial letters of the Treasury-LFT, up to the limit of R$ 6,100,000.00 (six million and one hundred thousand reais).

§ 1º From the amount referred to in the caput of this article, up to the limit of R$ 2,000,000.00 (two million reais) are to be used in the trading of the CODESA debit together with the National Social Insurance Institute-INSS, for payment of the initial installment.

§ 2º The characteristics of the Treasury Financial Letters? LFT to be issued in fulfillment of the provisions of the caput of this article, as well as the conditions of the operation will be defined in act of the Minister of State of the Farm.

Art. 42. It is the Union authorized to hire, at its sole discretion, internal loans with BNES, up to the value equivalent to U$$ 11,000,000.00 (eleven million dollars), intended for the purchase of imported equipment within the framework of the Programme of Upgrading and Consolidation of Infra?Academic Structure of Higher Education Institutions and their University Hospitals, of interest from the Ministry of Education.

Art. 43. The arts. 2º and 4º of Law No. 9,143 of December 8, 1995, pass vigorously with the following essay:

?Art. 2º It is the Union authorized to receive, in payment of the credit arising from the assumption of the obligations of CEEE, the equipment already acquired for the Thermotric Usina of Candiota III.? (NR)

?Art. 4º The assumption, by the Union, of the rights and obligations referred to in art. 1º, will have as a condition the occurrence of the following events:

I? approval approval of the withdrawer of the action of Security Mandate No. 96.01.462-4, in tramway at the Federal Regional Court of the 1º Region ;

II? release of the equipment stored in the ports located in the State, with no burden on storage fees ;

III? transfer of the resources tailored in the Federal Economic Box-CEF, for the account of the National Treasury, corresponding to the values paid by the Union, the responsibility of the ECEE, arising from the Brazil / France Agreement and the Agreement within the framework of the call Club of Paris, until August 3, 1998 ;

IV? transfer of the resources cautioned in the CEF to the account of the National Treasury, corresponding to the values paid by the Union, arising from the contract concluded between the Federative Republic of Brazil, through the Banco do Brasil S.A., and the Republic from France, on January 21, 1981, registered at the Central Bank of Brazil under paragraph 121/0114 ;

V? assumption of the commitment to honor, themarily, CEEE's liability obligations under the Brazil / France Agreements and the Paris Club, concerning registration No. 121/0114 of the Central Bank of Brazil ;

VI? total discharge to the Union of all values related to the construction project of the Usina of Candiota III.? (NR)

Art. 44. The acts practiced on the basis of the Provisional Measure No. 1.985-33, of October 26, 2000, shall be convalidated.

Art. 45. This Provisional Measure comes into force on the date of its publication.

Art. 46. It is repealed Law No. 9,358 of December 12, 1996.

Brasilia, November 23, 2000 ; 179º of Independence and 112º of the Republic.

FERNANDO HENRIQUE CARDOSO

Geraldo Magela of the Quintan Cross

Pedro Malan

Eliseu Padilha

Waldeck Ornélas

Rodolpho Tourinho Grandchild

Martus Tavares