I do know that the Federal Senate has approved, and I, Renan Calheiros, President, in the terms of art. 48, inciso XXVIII, of the Internal Rules, promulgated the following

R E S O L U Ç Ã

No. 6, OF 2005

Authorizes the State of São Paulo to hire operation of external credit, with a guarantee from the Union, with the Inter-American Development Bank (BID), worth up to US$ 5,000,000.00 (five million U.S. dollars).

The Federal Senate resolves:

Art. 1º The State of São Paulo is authorized to hire external credit operation, upon guarantee from the Union, with the Inter-American Development Bank (BID), in the value of up to US$ 5,000,000.00 (five million U.S. dollars).

Single paragraph. The advinds proceeds from the external credit operation referred to in the caput are intended for the partial financing of the São Paulo State Social Policy Assessment and Enhancement Project.

Art. 2º The credit operation referred to in art. 1º should be carried out in the following conditions:

I-debtor: State of São Paulo;

II-creditor: Inter-American Development Bank (BID);

III-guarantor: Federative Republic of Brazil;

IV-value: up to US$ 5,000,000.00 (five million U.S. dollars);

V-timeframe: 3 (three) years;

VI-amortization: semestral and consecutive plots, of values as much as possible equals, winning the first 6 (six) months from the date initially scheduled for the final disbursement and the last no later than 20 (twenty) years after the signing of the Contract;

VII -interest: required semestically, calculated on the periodic debtor balance of the Loan, at an annual rate for each quarter composed of:

a) rate of interest Libor quarterly to U.S. dollar;

b) more or (less) a cost margin related to the loans that finance the Libor modality loans;

c) plus the net value of any cost and the profit generated by operations to mitigate the Libor fluctuations; and

d) plus the margin for loans from the ordinary capital;

VIII-credit commission: required semester on the same interest payment dates and calculated on the basis of the maximum rate of up to 0.75% a.a. (seventy-five hundred percent a year) on the undisbursed balance of the loan, coming into effect 60 (sixty) days after the signing of the Contract; the State of São Paulo, at first, will pay a 0.25% a.a. Credit Commission. (twenty-five hundrths per cent per annum), and that percentage may be modified, semiannually, by the BID, without which, under no circumstances, it may exceed the target percentage of 0.75% a.a. (seventy-five hunduths per cent per year);

IX-resources for inspection and supervision general: during the disbursement period, no funding will be set aside for the service for inspection and general supervision expenses, unless the Bank establishes otherwise during that period. In no case, to meet the said expenses in a given semester, they will be able to target resources greater than 1% (one per cent) of the Financing, divided by the number of semesters understood in the original disbursement term.

Paragraph single. The payment dates of the principal and the financial burden could be changed depending on the date of signing of the loan agreement.

Art. 3º It is the Union authorized to grant assurance to the State of São Paulo in the external credit operation referred to in this Resolution.

Paragraph single. The permit provided for in the caput is conditional on the State of São Paulo to conclude contract with the Union for the granting of countermeasures, in the form of linking the own revenues generated by the taxes to which the arts are referred. 155 and 157 and the resources of which it treats art. 159, incisors I, point (a) and II, all of the Federal Constitution, and the Federal Government may withhold the transfers of resources necessary for coverage of the honorable commitments, directly from the centralizing accounts of the state's fundraising.

Art. 4º The authorization granted by this Resolution is to be exercised within the maximum period of 540 (five hundred and forty) days, counted from its publication.

Art. 5º This Resolution takes effect on the date of its publication.

Federal Senate, on April 25, 2005

Senator Renan Calheiros

President of the Federal Senate