PROVISIONAL MEASURE NO. 1.969-15, of March 30, 2000.

Establishes criteria for the consolidation, assumption and refinancing, by the Union, of the furnished public debt and others that specific, of responsibility of the Municipalities.

The PRESIDENT OF THE REPUBLIC, in the use of the assignment that gives him art. 62 of the Constitution, adopts the following Provisional Measure, with force of law:

Art. 1º Stay the Union authorized, until June 15, 2000, to assume the following obligations of responsibility of the Municipalities:

I-debt to domestic or foreign financial institutions, whose contracts have been firmed up to January 31, 1999, inclusive of that arising from transformation of debt-in-debt anticipatory operations founded;

II-debt to domestic or foreign financial institutions, arising from credit assignment firmed up to January 31, 1999;

III-internal furnishing debt constituted up to 12 percent of December 1995 or which, constituted after that date, connates simple rolling of previous furnishing debt;

IV-external furnishing debt constituted until December 12, 1995 or which, constituted after that date, consubstantive simple rollover of previous furnishing debt;

V-debt relative to budget revenue anticipation operations, contracted by January 31, 1999; and

VI-debt relative to operations of credit concluded with financial institutions in the quality of financial agent of the Union, of the States or of funds and government programs, regularly constituted.

§ 1º For effect of incisies I, III, V and VI will be considered only the registered operations, until January 31, 1999, at the Central Bank of Brazil.

§ 2º Powers to be still object of assumption by the Union the debts of member entities of the municipal public administration indirect, frictionable in the incisos I to VI of the caput and which are previously taken up by the Municipality.

§ 3º They will not be covered by the assumption referred to in this article nor by the refinancing referred to in the article next:

I-the debts renegotiated on the basis of the Laws 7,976, of December 27, 1989, and 8,727, of November 5, 1993;

II-the debts relating to the external debt object of renegotiation in scope of the Brazilian Foreign Debt Financing Plan (BIB, BEA, DMLP and the Paris Club);

III-the plots of the debts referred to in the incisos I, II, III, V and VI of the caput of this article which have not been disbursed by the financial institution until January 31, 1999;

IV-the service of the debts mentioned in the incisos I, II, V and VI of the caput of this article, unpaid and with maturity or any other form of exigency that has occurred between January 31, 1999 and the date of signing of the refinancing contract; and

V-the external debts to multilateral international bodies or foreign credit government agencies.

§ 4º The assumption that it treats this article will be preceded by the application of toll on the debtor balance of the obligations, as set forth by the Executive Power.

§ 5º Still the Union, in the respective maturities, provide the necessary resources to the payment of the debt of which it treats the inciso IV of the caput of this article, incorporating the value paid to the debtor balance of the refinancing.

Art. 2º The debts taken by the Union will be refunded to the Municipalities, noting the following:

I-deadline: up to three hundred and sixty monthly and successive installments, calculated based on the PriceTable, winning the first one in up to thirty days after the signing of the contract and the following on equal days of the subsequent months;

II-interest: calculated and debited monthly, at the rate of nine per cent per year, on the previously updated debtor balance;

III-monetary update: calculated and debited monthly based on the variation of the General Price Index-Internal Availability (IGP-DI), calculated by the Getulio Vargas Foundation, or other index that comes to replace;

IV-appropriate guarantees that will necessarily include the binding of own revenues and the resources of which they treat the arts. 156, 158 and 159, inciso I,?b?, and § 3º, of the Constitution, and the Supplemental Act No. 87, of September 13, 1996;

V-limit of commitment of thirteen percent of Actual Net Income-RLR, for fulfillment effect of the obligations corresponding to the service of the refunded debt;

VI-in the event of the failure of the paced obligations, without prejudice to the remaining contractual cominations, the charges referred to in the incisies II and III will be replaced by the adjusted average rate of the daily financing ascertained in the Special Settlement and Custody System (SELIC), released by the Central Bank of Brazil, plus one per cent per annum, rising by four percentage points o limit of commitment set out in the previous incission;

VII-in the event of impunctuality in the payment, without prejudice to the application of the provisions of the previous inciso, the value of the benefit will be updated by the adjusted average rate of the daily financing ascertained in the SELIC, released by the Central Bank of Brazil, and increased interest from one per cent to the year, calculated pro rata die; and

VIII-pass to the Municipalities of the desks applied to the obligations assumed by the Union.

§ 1º For the establishment of the deadline, the minimum of R$ 1,000.00 (thousand reais) will be observed for the initial value of the monthly redemptions of the refinancing contract.

§ 2º The elevation of the commitment limit will be applied from the subsequent installment to the unfulfillment.

§ 3º The accruals to which inciso VII are concerned are not subject to the limit of commitment of the RLR.

§ 4º The interest rate could be reduced to:

I-seven integers and five tenths per cent, if the Municipality depreciates extraordinarily value equivalent to ten per cent of the debtor balance updated of the debt taken up and refunded by the Union; and

II-six percent, if the Municipality depreciates extraordinarily value equivalent to twenty percent of the updated debtor balance of the debt taken over and refunded by the Union.

§ 5º The reduction referred to in the preceding paragraph shall be applied from the date of the integralisation of the corresponding percentage of extraordinary amortization.

§ 6º Do not apply to amortization extraordinary that it deals with § 4º of this article:

I-the provisions of the art. 5º, and

II-the limit of commitment of RLR.

§ 7º The liability debts of the Municipalities to the Union, except those relating to taxes and contributions, contracted by January 31, 1999, may be refunded in the form of this Provisional Measure.

Art. 3º At the discretion of the Municipality, the debt could be refunded at rates lower than that provided for in the inciso II of the art. 2º, provided that extraordinary amortization is effected within thirty months of the date of signing of the respective refinancing contracts.

§ 1º The rates of which they treat the caput will be from:

I-seven integers and five tenths per cent, if the Municipality commits itself to amortization extraordinarily equivalent to ten percent of the updated debtor balance of the debt assumed and refunded by the Union; and

II-six percent, if the Municipality commits itself to amortization extraordinarily value equivalent to twenty percent of the updated debtor balance of the debt assumed and refunded by the Union.

§ 2º Fishing the term established in the caput and not being carried out in full the extraordinary amortization:

I-the debtor balance will be recalculated, from the date of the signing of the contract, by changing the interest rate to:

a) nine percent, if the Municipality has committed itself in the form of the inciso I of the preceding paragraph;

b) nine percent, if the Municipality has committed itself in the form of the inciso II of the preceding paragraph and the extraordinary amortization has not reached ten percent of the updated debtor balance; and

c) seven and a half percent, if the Municipality has committed itself in the form of the inciso II of the preceding paragraph and the amortization has reached ten percent of the debtor balance updated;

II-the value corresponding to five times the share of the extraordinary amortization unrealized, duly updated in the form of the previous inciso, will be trimmed from the debtor balance of principal and refunded debt by the average cost of capturing the Federal Government's furnished debt, in place of the contracted financial burdens, not applying to the value trimmed the limit of expenditures set out in the inciso V of the art. 2º.

Art. 4º The public securities issued for payment of judicial precatories that do not satisfy the condition imposed by § 1º of the art. 12 of Resolution No. 78, 1º July 1998, of the Federal Senate, and which are not subject to the fence contained in Paragraph 3º of the same article, may be the object of the assumption and refinancing to which the previous articles refer, in this regard, in this hypothesis, that the monthly instalment of the refinancing contract will correspond, at the very least, to the benefit that would be due in respect of those securities, calculated by the Table Price, for the period of one hundred and twenty months.

Art. 5º For the purposes of applying the limit set forth in the inciso V of the art. 2º, may be deducted from the limit ascertained the expenses effectively carried out in the previous month by the Municipality, corresponding to the services of the following obligations by it titled:

I-debt refunded on the basis of Law No. 7,976, from 1989;

II-external debt contracted until January 31, 1999, even that object of restructuring under the Brazilian Plan of Foreign Debt Financing (BIB, BEA, DMLP and Paris Club);

III-parceling of debts firmed on the basis of the art. 58 of Law No. 8,212 of July 24, 1991 and in Law No. 8,620 of January 5, 1993;

IV-debts parceled to the Service Time Guarantee Fund-FGTS, the formalization of which has occurred until January 31 of 1999;

V-commission of the agent, incident on the payment of the provision arising from Law No. 8,727, of 1993; and

VI-debt relating to real estate credit refunded to the Amparo of Law No. 8,727, of 1993, and effectively assumed by the Municipality, deduced the revenues earned from those operations.

§ 1º Powers, still, be deducted the expenses regarding principal, interest and too much burden of the operations arising from the Law No. 8,727, of 1993, carried out in the month, excepted the agent's commission.

§ 2º The figures for the reduction of the benefit by the application of the limit referred to in this article or by the deduction referred to in the following article shall have your poster payment, on them focusing on the financial burdens of the refinancing contracts, for the time when the debt service compromises value lower than the limit.

§ 3º The limit of thirteen percent established in art. 2º is applicable only for the refunded debts pursuant to this Interim Measment.

§ 4º The eventual debtor balance resulting from the application of the commitment limit established in the form of this article, may be refunded under the same conditions as this Provisional Measure, in up to one hundred and twenty months, from the maturity of the last instalment of the refinancing contract.

§ 5º In the case provided for in the preceding paragraph, the installments may not be lower than the value of the last instalment of the refinancing.

Art. 6º The amount effectively disbursed by the Municipality regarding the service of the debts mentioned in the incisos I, II, III and IV of the art. 1º, due between January 31, 1999 and the date of signing of the refinancing contract, can be deducted from the benefits calculated good basis in Table Price, capped the monthly deduction at fifty per cent of the value of the first provision.

Art. 7º For the purposes of this Provisional Measure, it is understood to be RLR the revenue realized in the twelve months prior to the month immediately preceding that in which it is being ascertained, noted the following:

I-will be excluded from revenues from credit operations, cancellation of remains payable, disposal of goods, transfers linked to any title, from voluntary transfers or donations received with the end specific to meet capital expenditure; and

II-will be computed the proceeds from the proceeds from the Excitement of the Tax on Relative Operations to the Circulation of Goods and on Prestations of Transport Services Interstate and Intercity and Communication intended for the granting of any tax or financial favors, including in the form of loans or financing, albeit by means of funds, financial institutions or other entities controlled by the public power, granted on the basis of the said tax and which results in a reduction or elimination, direct or indirect, of the respective burden.

Single paragraph. The surplus financial of the authorities and foundations, excluded those of the previdentiary character, will be considered as revenue realized for the purposes of calculating RLR.

Art. 8º The debt refinancing contract is expected to provide that the Municipality:

I-will only be able to issue new securities of the domestic or external municipal furnishable debt, after the full settlement of the debt object of the refinancing provided for in this Provisional Measure; And

II-will only be able to contract new debt, including Budget Revenue Anticipation operations, if the Municipality's total financial debt is lower than its annual RLR.

Single paragraph. Excluded from the sealings referred to in the inciso II:

I-the contracting of credit operations instituted by federal programs, aimed at the modernization and the appearance of the administrative machinery of the Municipalities;

II-loans or external financing to multilateral financial bodies and institutions of fomenting and cooperation connected to foreign governments, provided that they contract within the period of one year counted from June 30 of 1999 and intended solely for the supplementation of ongoing programs, which have positive evaluation from the funder-finance agency.

Art. 9º The RLR commitment limit of which treats the inciso V of the art. 2º will be raised by two percentage points for the Municipalities that, as of 1º January 2000:

I-do not have adequate their personnel expenses to the limits set out in the legislation in force;

II -have not deployed pension contribution to the active and inactive servers, with average aliquot of, at minimum, eleven percent of total remuneration; and

III-have not limited their expenses with retirees and pensioners, in the form of the legislation in force.

Art. 10. Only by law will new compositions or extensions of debts refunded on the basis of this Provisional Measure be permitted, or, still, change to any title of the established refinancing conditions.

Art. 11. The Union shall assume the obligations arising from this Provisional Measure upon issuance of National Treasury securities, with characteristics to be defined by the Executive Power.

Art. 12. Revenue from the refunding payments granted to Municipalities, pursuant to this Interim Measure, shall be fully used for abatement of the public debt liability of the National Treasury.

Art. 13. Stands the Bank of Brazil S.A. designated financial agent of the Union for the purpose of concluding, monitoring and controlling the contracts for the assumption and refinancing of which it treats this Provisional Measure, by having the debtor the payment of the concernperson remuneration.

Art. 14. It shall be the Union authorised to carry out, through the Federal Economic Box, credit operations with the Municipalities, intended for programs for strengthening and modernizing the municipal administrative machinery, using for that purpose resources coming from loan contracts with international financial bodies.

Art. 15. It is provided to the Curator Council of the Service Time Guarantee Fund-FGTS, in the assumption of assumption by the Union of obligations concerning FGTS repasses, pursuant to this Provisional Measure, to authorize the financial officers to promote the return of the repast resources, under the originally established conditions, provided that sufficient guarantees are constituted.

Art. 16. The devices ahead of Law No. 9,639, of May 25, 1998, go on to invigorate with the following essay:

?Art. 1º States, the Federal District and the Municipalities, by December 17, 1999, will be able to opt for the amortization of their debts to the National Institute of Social Insurance-INSS, arising from social contributions, as well as those arising from obligations ancillations, up to competence November 1999, upon employment of four percentage points of the Participation Fund of the FPE and nine percentage points of the Participation Fund of Municipalities-FPM.

§ 1º The federative units mentioned in this article will be able to choose to include in that kind of amortization the debts, up to the competence November 1999, of their authorities and of the foundations by it instituted and maintained, hypothesis in which there will be the addition of three points in the FPE and three-point percentage of the FPM referred to in the caput.

§ 2º Mediant the employment of plus four percentage points of the respective Participation Fund, the federative units a which refers to this article will be able to choose to include, in this kind of amortization, debts constituted up to the competence November 1999 towards the INSS, of its public companies and mixed economy societies, by retaining the criteria of updating and incidence of legal accruals applicable to companies of this nature.

§ 3º The inclusion of the debts of mixed-economy societies in the amortization provided for in this article will depend on state authoritioneslaw, district or municipal.

§ 4º The amortization term may not be less than ninety six months and not more than two hundred and forty months, not applying, for the purposes of adequacy of these limits, the percentage provided for in the caput of this article and the reduction established by art. 3º.

§ 5º The consolidated debt in the form of this article shall subject, as of the date of consolidation, interest corresponding to the monthly variation of the Long-Term Interest Rate-TJLP, vetoing the imposition of any other addition.? (NR)

?Art. 2º .....................................................................................................................................

Single Paragraph. The parcelment concluded in the form of this article shall contain clause in which the State, Federal District or the Municipality consent to the retention of the FPE or the FPM and the repass to the INSS of the value corresponding to each monthly instalment on the occasion of the salary of this one.? (NR)

?Art. 5º The agreement concluded on the basis of the arts. 1º and 3º shall contain clause in which the State, the Federal District or the Municipality consent to the retention of the FPE and the FPM and the repass to the previdential municipality of the value corresponding to the current pension obligations of the month preceding that of the receipt of the their respective Participation Fund.

§ 1º To the plots of the current pension obligations settled in the form of the caput of this article, the provisions of the arts do not apply. 30, inciso I, point?b?, and 34 of Law No. 8,212 of July 24, 1991.

§ 2º Constant, still, in the agreement mentioned in this article, clause in which the State, the Federal District or the Municipality consent to the retention by the financial institutions of other state, district or municipal revenues deposited therein and the repass to the INSS of the remainder of the ascertained pension debt, in the hypothesis that the resources arising from the FPE and the FPM are not sufficient for the discharge of the amortization provided for in the art. 1º and the current pension obligations.

§ 3º The monthly value of current pension obligations, for the purpose of this article, will be ascertained on the basis of the respective FGTS and Information Recreation Guide to the Social Security-GFIP or, in the case of its non-submission within the statutory period, estimated, using the average of the last twelve competencies collected prior to the month of withholding, without prejudice to the collection or refund or compensation of any differences.

§ 4º The amortization referred to in art. 1º of this Act, increased from current pension obligations, could, monthly, commit up to fifteen percentage points of the Municipal Net Current Income Tax.

§ 5º The values due to the INSS and not collected, each month, on the grounds of the application of the preceding paragraph shall be repaced at the end of the term of the agreement provided for in this article.

§ 6º For the purposes of the provisions of this article, it is understood to be Revenue Stream Municipal and revenue calculated as per the Supplementary Act No. 96 of May 31, 1999.? (NR)

Art. 17. The art. 38 of Law No. 8,212 of July 24, 1991, passes the vigour with the following essay:

?Art. 38. ...................................................................................................................................

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§ 10. The agreement entered into with the State, the Federal District or the Municipality shall contain, still, the clause in which these authorize, when there is the lack of payment of overdue debits or installment of installment agreements, the retention of the Participation Fund of the States-FPE or the Participation Fund of Municipalities-FPM and the repass to the National Institute of Social Insurance-INSS of the value corresponding to the mora, on the occasion of the first transfer occurring after the communication of the municipality previdentiary to the Ministry of Finance.

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§ 12. The agreement provided for in this article shall contain clause in which the State, the Federal District and the Municipality consent to the retention of the FPE and the FPM and to the repass to the previdential municipality of the value corresponding to the current pension obligations of the month previous to that of the respective receipt of Participation Fund.

§ 13. It shall, still, in the agreement mentioned in this article, clause in which the State, the Federal District or the Municipality consent to the retention by the financial institutions of other state, district or municipal revenue deposited therein and the repass to the INSS of the remainder of the ascertained pension debt, in the hypothesis that the resources coming from the FPE and the FPM are not sufficient for the discharge of the parceling and the current pension obligations.

§ 14. The monthly value of current pension obligations, for the purpose of this article, will be ascertained on the basis of the respective FGTS Recreation Guide and Social Security Information-GFIP, or, in the case of its non-submission on the statutory deadline, estimated, using the average of the last twelve competencies collected prior to the month of retention provided for in § 12 of this article, without prejudice to the collection or restitution or compensation of any differences.? (NR)

Art. 18. The Act No. 9,717 of November 27, 1998 shall become the invigorate with the following amendments:

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

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III-the contributions of the Union, of the states, of the Federal district and the Municipalities and the contributions of civil and military personnel, active and inactive, and pensioners, will only be able to be used for payment of pension benefits of the respective schemes, resourced the expenses administrative established in art. 6º, inciso VIII, of this Act, observed the spending limits set out in general parameter;

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Single paragraph. In the case of Municipalities, it constitutes an additional requirement for organization and operation of social welfare of public servants of public servants to have revenue directly raised, in the form established by general parameters, higher than the coming from constitutional transfers from the Union.? (NR)

?Art. 2º-A. It shall be suspended, until December 31, 2000, the exigency of the provisions of Paragraph 1º of the art. 2º of this Law.? (NR)

?Art. 9º ....................................................................................................................................

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III-the apuration of infractions, per server accredited, and the application of penalties, by own organ, in the cases provided for in the art. 8º of this Act.

Single paragraph. The Union, the States, the Federal District and the Municipalities shall pay to the Ministry of Welfare and Social Care, when requested, information on social welfare arrangements of social welfare and previdionary fund provided for in the art. 6º of this Law.? (NR)

Art. 19. The financial compensation between the social welfare schemes of the Union, the States, the Federal District and the Municipalities, in the hypothesis of reciprocal counting of contribution times, shall comply, in what couber, to the provisions of the Law No. 9,796, of May 5, 1999.

Art. 20. The Law No. 9,604 of February 5, 1998, passes the increased vigour of the following article:

?Art. 2º-A. The National Social Assistance Fund-FNAS will be able to transfer financial resources for the development of the continuing social assistance shares directly to private welfare entities, starting from the competence of the month of December of 1999, regardless of the conclusion of agreement, convennial, adjustment or contract, in exceptional character, when the repass cannot be effected directly to the State, Federal District or the Municipality in default of these entes ' default with the Social Security System.

Single Paragraph. The Executive Power will regulate the continuing actions of social assistance, of which it treats this article, within thirty days, as of December 10, 1999.? (NR)

Art. 21. They are convalidated the acts practiced on the basis of the Provisional Measure No. 1.969-14, of March 2, 2000.

Art. 22. This Interim Measure shall come into force on the date of its publication.

Art. 23. It is revoked the caput of the art. 95 of Law No. 8,213, of July 24, 1991.

Brasilia, March 30, 2000; 179º of Independence and 112º of the Republic.

fernando cardoso henrique

Pedro Malan

Waldeck Ornélas