LEI No. 10,696, OF July 2, 2003.

Disposes on repacing and elongation of debts arising from rural credit operations, and gives other arrangements.

THE PRESIDENT OF THE REPUBLIC

I do know that the Congress National decrees and I sanction the following Law:

Art. 1º Stay authorized for repacing and elongation of debts arising from rural credit operations contracted under the Special Credit Program for Agrarian Reform-PROCERA, whose borrowers are either adimated with their obligations or they regularise them up to ninety days after the date on which the regulation of this Act is published, observed the following conditions:

I-repactuation, by the term of up to eighteen years, taking up the debtor balance updated by the paced charges for normality situation up to date of repactuation, incorporating the interest on which it treats inciso II, and calculating annual, equal and successive instalments, winning the first on June 30, 2006;

II-as of the date of repactuation, the operations will be subject to the effective rate of interest of one whole and fifteen hundredths per cent per annum;

III-the borrowers will do jus, in the repaced operations, the seventy-percent addedness bonus on each of the plots, as long as the payment occurs to the date aprazed;

IV-the financial agents will have up to one hundred and eighty days after the date on which the regulation of this Act is published for formalisation of the instrument of repactuation.

Art. 2º The delinquent borrowers who do not opt for the repactuation will be jus to the ninety-percent addefault bonus, in the case of full payment of their debits up to one hundred and twenty days after the date on which the regulation of this Act is published.

Art. 3º The borrowers with benefits accrued from 2001 will be able to be beneficiaries of the repactuation in the conditions described in the incisors of art. 1º.

Art. 4º borrowers with overdue bonds in years prior to 2001 will have two alternatives to framing in the provisions of the art. 1º:

I-repactuation of the somatory of the full benefits accrued, taken without bonus and free of charge additional inadimple; or

II-payment of the full benefits accrued, taken free of charge additional inadimplement and applying the bonus of which treats the inciso III of the art. 1º on the amount arrears.

Art. 5º It is authorized to individualize the collective or grupal operations to the amparo of the PROCERA, including those carried out by associations and cooperatives, to enable the service to be given to each borrower in isolation.

§ 1º The integral borrowers of collective or grupal contracts, when they opt for the operation individualized that it treats the caput, will be able to be worth:

I-of the faculty provided for in the art. 1º, if they are adimated with their due obligations in years prior to 2001;

II-of one of the constant alternatives of art. 4º, if they are delinquent with their due obligations in years prior to 2001.

§ 2º Applies to the individualized operations the willing in the arts. 2º, caput, and 3º, caput and § 1º, of Law No. 10,186, of February 12, 2001, and remains the warranty originally linked to the collective or grupal contract when all borrowers opt for individualization.

§ 3º In cases where at least one of the collective contract borrowers collective or grupal does not opt for the individualization:

I-the financial agent gets authorized to hire debt assumption operation with co-operative or association from whose social framework borrowers participate, by retaining the guarantee originally linked to the collective or grupal contract, for the purposes of ensuring that the good in warranty remains serving the rural activities of the farmers; or

II-out of the hypothesis referred to in the inciso I, with at least one borrower default that did not opt for individualization until the end of the deadline set in the art's caput . 1º, for the regularization of the obligations, the financial officer shall start, on the following business day, the arrangements relating to the forwarding of the contract for the collection of the outstanding claims and their enrolment in Active Debt of the Union, observed the legislation in vigour.

§ 4º If there is execution of the warranty linked to the collective or grupal contract, due to the that provides § 3º, inciso II, possible surplus of resources, after settled the obligations of borrowers who have not opted for individualisation, will be repaid to the amortization, proportionally, of the individualized operations in the form of this article.

Art. 6º Cumpre to financial agents:

I-initiate the arrangements for the forwarding of the contracts to the amparo of the PROCERA for collection of credits and their enrollment in Active Debt of the Union, observed the legislation in force:

a) on September 30, 2003, in the case of borrowers with overdue bonds in years prior to 2001 that are not worth one of the alternatives provided for in the art. 4º;

b) after one hundred and eighty days of the unpaid benefit due; and

II-inform, within the period of up to one hundred and twenty days after the date on which the regulation of this Act is published, to the Registry of Family Agriculture of the Ministry of Agrarian Development and the National Treasury Board Secretariat of the Ministry of Finance, the amounts involved in the repactuations and bond settlements.

Art. 7º It is authorized to renegotiate debts arising from rural credit operations contracted by family farmers, mini and small producers and from their cooperatives and associations, in the total value originally financed of up to R$ 35,000.00 (thirty-five thousand reais) in one or more transactions of the same beneficiary, whose borrowers are either adimated with their obligations or regularise them under the contractual rules one hundred and twenty days after the date on which it is published regulation of this Act, observed the following characteristics and conditions:

I-in financing of costing and investment granted until December 31, 1997, with resources from the Northern, Northeast and Midwest Financing Constitutional Funds of the Amparo Fund to Worker-FAT, in the case of operations classified as "Rural PROGER", or equalized by the National Treasury, in the total value originally hired of up to R$ 15,000.00 (fifteen thousand reais), for investment, and up to R$ 5,000.00 (five thousand reais), for costing, in one or more operations of the same beneficiary, which were not renegotiated on the basis of Law No. 9,138 of November 29, 1995, and by Resolution No. 2,765 of August 10, 2000:

a) rebate on the debtor balance of the investment operations equivalent to eight integers and eight tenths per cent, on the date of repactuation;

b) bonus of thirty percent addedness on each share of the debt paid up to the date of the respective maturity, in the case of the costing and investment operations contracted in the region of the Constitutional Funds, and of twenty percent in the operations of costing and investment in the country's remaining regions, being that in the semi-arid regions, and North of the Holy Spirit, the bonus will be from seventy percent to costing and investment;

c) application of effective three percent interest rate by the year, from the date of repactuation in investment operations, and from four per cent to the year on the cusp;

d) in the case of investment transactions, the debtor balance ascertained on the date of repacing will be extended by the ten-year period, included two years of deficiency, to be settled in instalments equal, annual and successive, being that the repaced custeion operations will be settled in three annual, equal and successive installments, after a year of caress counted from the date of the repactuation;

e) in the case of financing with resources of the mentioned Constitutional Funds, adherence to repactuation will waived counterpart financial by the borrower, requiring, in the remaining cases, the payment, in the act of the formalization of the repactuation instrument, of the value corresponding to ten percent of the sum of the overdue benefits, taken without bonuses and free of charge additional inadimple;

II-in the costing and investment financing granted in the period of January 2, 1998 to June 30, 2000, under the National Programme for Strengthening of Familial Agriculture-PRONAF; with resources from the Northern Financing Constitutional Funds, Northeast and Center-Oeste; from the Amparo Fund to the Worker -FAT, in the case of operations classified as "PROGER Rural", or equalized by the National Treasury, in the total value originally contracted of up to R$ 15,000.00 (fifteen thousand reais), for investment, and up to R$ 5,000.00 (five thousand reais) for costing, in one or more operations of the same beneficiary:

a) rebate of eight integers and eight tenths per cent in the investment balance debtor of the investment operations, at the 1º January 2002 position, provided that it is contracted operation with post-fixed charges;

(b) in the case of investment transactions, the debtor balance ascertained on the date of repacing will be extended by the ten-year period, included two years of deficiency, to be settled in installments equal, annual and successive, being that the repaced custeion operations will be settled in three annual, equal and successive installments, after a year of caress counted from the date of the repactuation;

c) application of effective rate of three per cent to the year from 1º January 2002, with the conditions differentiated for the semi-arid provided for in paragraph b of the inciso I;

III-in the investment financing granted in the periods referenced in the incisors I and II, to the resource amparo of the Northern, Northeast and Midwest Financing Constitutional Funds, with total value originally contracted above R$ 15,000.00 (fifteen thousand reais) and up to R$ 35,000.00 (thirty-five thousand reais), observed the following conditions:

a) the provisions of inciso I or II, apply, as per the date of the formalization of the original operation, for the repayment of the debtor balance, or of the provision, which corresponds to the limit of R$ 15,000.00 (fifteen thousand reais) on the date of the original contract;

b) for the repayment of the debtor balance, or of the provision, which relates to the original credit surplus to the limit of R$ 15,000.00 (fifteen thousand reais), the prevailing contractual charges for normality situation remain.

§ 1º In the case of operations referenced in the caput of this article formalized with co-operative or association of producers, consider:

I-each ballots-daughter or individual credit instrument originally struck by final beneficiary of credit;

II-as individual limit, in the case of operation that did not involve repassing of resources to cooperates or associates, the result of the splitting of the value originally financed by the total number of cooperates or associates of the entity that fall as family farmers, respected the same ceiling of R$ 35,000.00 (thirty five thousand reais) for framing.

§ 2º In the early and total settlement hypothesis of the debtor balance of the operations referred to in the caput of this article by December 31, 2006, will apply additional bonus of ten percent on the amount due.

§ 3º For effect of the provisions of the incisos II and III of the caput of this article, stay the managers of the Constitutional Funds authorized to reclassify the operations carried out simultaneously with resources from the FAT and one of the Constitutional Funds for the portfolio of the respective Fund, as well as, in that case, to assume the burden arising from the provisions of this article.

§ 4º Applied the conditions laid down in the inciso I, of the caput of this article, to borrowers who have renegotiated their debts on the basis of legislations subsequent to Resolution No. 2,765 of August 10, 2000 exclusively in the areas of comprehensiveness of the Constitutional Funds, not being cumulative the benefits provided for in this Act with the previously repaced.

§ 5º For the financing of which they treat incisors I and II, carried out in the North-East region and lasted with resources from the Amparo Fund to Worker-FAT in operations with mixed resources from that Fund and the Northeast Financing Constitutional Fund, or carried out only with FAT resources without equalization, in this region, the total value of originally contracted not to exceed R$ 35,000.00 (thirty five thousand reais), the following provisions prevail:

I-apply the benefits of which treat incisos I or II, as per the date of formalization of the original operation, for the repayment of the debtor balance, or of the provision, which corresponds to the limit of R$ 15,000.00 (fifteen thousand reais);

II-the share of the debtor balance, ascertained on the date of repactuation, which concerns the original credit surplus to the limit of R$ 15,000.00 (fifteen thousand reais), in the region of the semi-arid, included north of the Holy Spirit, could be extended by the ten-year period, included two years of grace, with rebate from fifty percent on the installment or installment settled on the due date, and effective interest rate of three percent a year from 1º January 2002.

Art. 8º Stay authorized, for financing up to the value of R$ 15,000.00 (fifteen thousand reais) granted to the producers Rural that are backed by resources from sources other than the Northern, Northeast and Midwest Financing Constitutional Funds in the case of crop frustration by weather phenomena in municipalities enacted in an emergency or state of public calamity, with recognition of the Federal Government, the conversion of the operations to the scope of the respective Constitutional Fund, fully retaining the financial conditions of the PRONAF, in the cases of family farmers, mini and small producers and, for the remaining cases, the conditions laid down in the art. 1º of the Law no 10,177, of January 12, 2001, with absorption of the respective burden by the Constitutional Fund.

Art. 9º It is the Ministry of Agrarian Development in charge of the legal and administrative arrangements necessary for the appointment of liquidator to conduct the closure proceedings of the activities of the Contabil Fund of the PROCERA.

Single paragraph. It sits the Federal Office of Internal Control tasked with certifying the values of the assets and liabilities of the Contabil Fund of the PROCERA.

Art. 10. Stay the managers of the Northern Funding Constitutional Funds, Northeast and Midwest allowed to grant addedness bonus on each share of the debt paid up to maturity, in the proportions and conditions to be explained, in the case of credit operations to the rural sector to the amparo of resources of these Funds, whose borrowers are either delinquent with their obligations or regularize them until ninety days after the date on which the regulation of this Act is published:

I-value operations originally funded of up to R$ 200,000.00 (two hundred thousand reais):

a) in the debts incurred until December 31, 1994: thirty-five percent;

b) in the debts incurred in the year 1995: twenty five percent;

c) in the debts incurred in the year 1996: nineteen percent;

d) in the debts incurred in the year 1997: seventeen per cent;

e) in the debts incurred in the year 1998: fourteen per cent;

II-operations of value originally financed above R$ 200,000.00 (two hundred thousand reais):

a) for the fraction of each plot that corresponds to the original credit of R$ 200,000.00 (two hundred thousand reais) applies to the provisions of the inciso I;

b) for the fraction of the parcel that concerns the original credit surplus to the limit of R$ 200,000.00 (two hundred thousand reais) are kept the paced financial burdens without application of the bonus here established.

§ 1º For application of the provisions of this article, the sum of the existing operations on behalf of the same issuer of the credit instrument, identified by the respective Physical Person Cadre-CPF or National Cadastro of the Legal Person-CNPJ.

§ 2º The willing in this article applies only to operations that have not been contemplated with the benefits established in art. 7º of this Law.

Art. 11. The deadline set by § 3º of the art. 3º of Law No. 10,177 of January 12, 2001, for the closure of the renegotiations, extensions and compositions of amparted debts in the resources of the Constitutional Funds, is changed to up to ninety days after the date on which it is published regulation of this Act, without such a dilation of time reaching the alternative way of which it treats art. 4º of the said Act.

Art. 12. For the purpose of the provisions of the art. 2º of Law No. 10,437 of April 25, 2002, it is admitted that the regularization of the plots in arrears until February 28, 2003, exclusively of the operations acquired by the Union under the aegis of the Provisional Measure No. 2.196-3 of August 24, 2001, occur upon the hiring of new operation carried out by the borrower, until ninety days after the regulation of this Act, observed the following conditions:

I-payment, in kind, of ten per cent of the debtor balance in arrears;

II-refinancing in thirteen years of the remaining debtor balance, upon repactuation linked to the acquisition of Federal Public Securities equivalent to twenty integers and sixty-two one hundred percent of this remaining balance, to be given in warranty to the creditor.

Single paragraph. For operations refunded in the terms of the inciso II of this article, the benefits provided for in the incisys I and II, of the art, apply. 2º of Law No. 10,437 of April 25, 2002 on the interest parcels paid up to maturity.

Art. 13. The inciso I of art. 2º of Law No. 10,437 of April 25, 2002, passes the vigour with the following essay:

" Art. 2º ..........................................................

I-zero comma setecent and fifty-nine per cent to the month on the main balance, for the IGP-M variation of the month immediately preceding the incidence;

................................................................... " (NR)

Art. 14. It shall be authorised, for the operations acquired by the Union under the aegis of the Provisional Measure No. 2.196-3 of August 24, 2001, which are liable to framing in the art. 2º of Law No. 10,437 of April 25, 2002, the replacement of the paced financial charges, in the period commenced on October 28, 2002 up to sixty days after the date of the publication of this Act, by the charges set out in the terms of the incisos I and II of the caput of the said art. 2º.

§ 1º The installments that were due on October 28, 2002 are corrected from the following form:

I-of the respective maturities until the October 27, 2002, by the financial burden defined in art. 5º of the Provisional Measure No. 2.196-3, of August 24, 2001;

II-from October 28, 2002 until sixty days after the date of the publication of this Law, by the burdens set forth in art. 2º of Law No. 10,437 of April 25, 2002.

§ 2º Applying to the provisions of the caput of this article to parcels with maturity from October 28, 2002 up to sixty days after the date of the publication of this Act, as long as it is paid until maturity.

Art. 15. Federal official banks will, at their sole discretion, be able to delay the purposeful or suspend the process of judicial execution of rural credit operations debts, in the case of family farmers, mini and small-scale producers and their cooperatives and associations, when they involve originally funded value of up to R$ 35,000.00 (thirty-five thousand reais) in projects located in the areas of comprehensiveness of the Northern, Northeast or Midwest Financing Constitutional Funds, provided that there is recognition of the need for reconversion of activities for rescue or extension of farmers ' income generation capacity.

§ 1º For the recognition effect of the need for reconversion of activities, federal official banks will be able to be worth of studies carried out by research and delivery entities of technical assistance and rural extension.

§ 2º Excludes from the provisions of this article the acquired operations under the aegis of the Provisional Measure No. 2.196-3 of August 24, 2001, the renegotiated on the basis of Law No. 9,138 of November 29, 1995, those contemplated by art. 7º of this Act and those formalized after June 30, 2000.

§ 3º Applied the provisions of this article to the resources-backed operations of the Northern, Northeast, or Midwest Financing Constitutional Funds.

Art. 16. The costs arising from this Act, within the framework of the PROCERA, the Constitutional Funds and the Official Credit Operations, will be compensated with the result arising from the contingency established by the Executive Power in this exercise, in the terms of the art. 67 of Law No. 10,524, of July 25, 2002, and of art. 9º of the Supplementary Act No. 101 of May 4, 2000, which may be released for these or other purposes.

Art. 17. For the purpose of the provisions of the art. 1º, inciso I, paragraph 10,177 (a) of the Law No. 10,177 of January 12, 2001, are considered components of the financial burden the rebates and bonuses by adimplements that are applied to the financing provided to the beneficiaries of the PRONAF, depending on resolution of the National Monetary Council, ending the burden of these benefits to the respective Constitutional Fund of North, Northeast, or Midwest.

Art. 18. The § 1º of the art. 9º of Law No. 8,723 of October 28, 1993, passes the vigour with the following essay:

" Art. 9º ...........................................

§ 1º The Executive Power will be able to raise the said percentage by the limit of twenty five percent or reduce it to twenty percent.

..................................................... " (NR)

Art. 19. It is established the Food Acquisition Program with the purpose of encouraging family farming, understanding actions linked to the distribution of agri-livestock products for people in food insecurity and training of strategic stocks.

§ 1º The resources raised from the sale of strategic stockpiles formed in the terms of this article will be destined in full to the actions of fighting hunger and the promotion of food security.

§ 2º The Programme of which treats the caput will be aimed at the acquisition of agri-cattle products produced by family farmers who are enrolling in the National Strengthening Programme Family-owned Agriculture-PRONAF, staying dispensed with bidding for such an acquisition as long as the prices are not higher than those practiced in the regional markets.

§ 3º The Executive Power will constitute Gestor Group, formed by representatives of the Ministries of Agrarian Development; of Agriculture, Livestock and Supply; of the Farm; of the Planning, Budget and Management; and of the Office of the Extraordinary Minister of Food Safety and Combating Hunger, for the operationalization of the Program of which it treats the caput.

§ 4º The acquisition of products in the form of the caput can only be done on the limits of budget availabilities and financial.

Art. 20. The National Monetary Council, in what couber, shall discipline compliance with the provisions of this Act.

Art. 21. This Law comes into effect on the date of its publication.

Art. 22. Revogize the Laws 10,464, of May 24, 2002, and 10,646, of March 28, 2003.

Brasilia, July 2, 2003; 182º of Independence and 115º of the Republic.

LUIZ INACIO LULA DA SILVA

Antonio Palocci Filho

Roberto Rodrigues

Guido Mantega

Miguel Soldatelli Rossetto

José Graziano da Silva

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