Provisional Measure No. 2.043-19 of June 28, 2000.

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

The PRESIDENT OF THE REPUBLIC, in the use of the assignment that confers it on 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 financial or foreign institutions, whose contracts have been firmed up to January 31, 1999, inclusive of that arising from transforming budget revenue anticipation operations into founded debt;

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

III-internal furnishing debt constituted until December 12 of 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, connates simple rollover of previous furnishing debt;

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

VI-debt on credit operations celebrated with financial institutions in the quality of financial people of the Union, states or 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, framed in the incisos I to VI of the caput and which are previously taken over by the Municipality.

§ 3º 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 form of exigency that has occurred between January 31, 1999 and the date of signing of the refinancing contract may be refunded by the Union, observed the conditions set out in this Interim Measuring, except as for:

I-term: in up to one hundred and eighty months, with monthly and consecutive installments, winning the first on the date of signing of the refinancing contract and, the remaining ones, on the due dates stipulated for the rest of the debts refunded to the amparo of this Provisional Measure;

II-charges: equivalent to the average cost of capping the internal furnished debt of the Federal Government (SELIC Rate), plus, in the event of inaddition, of moratory interest from 1% a.a., on the previously updated debtor balance;

III-extra-limit of the remaining debts refunded in the form of this Interim Measement and Law No. 8,727, of November 5, 1993; and

IV-minimum monthly amortization of R$ 1,000.00 (thousand reais), additionally to that provided for in § 1º of the art. 2º.

§ 4º shall not be covered by the assumption referred to in this article nor by the refinancing referred to in the following article:

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

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

III -the plots of the debts referred to in the incisies 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; and

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

§ 5º The assumption that it treats this article will be preceded by the application of toll on the debtor balance of the obligations, as established by the Executive Power.

§ 6º Might still the Union, in the respective maturities, provide the necessary resources to the payment of the debt that treats the inciso IV of the caput of this article, incorporating the value paid to the refinancing debtor balance.

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

I-term: until three hundred and sixty monthly installments and successive, calculated on the basis of the Price Table, winning the first one in up to thirty days after the signing of the contract and the following in equal days of the subsequent months;

II-interest: calculated and debited monthly, à rate of nine percent a 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 be substituted;

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 Supplementary Act No. 87 of September 13, 1996;

V-limit of commitment of thirteen percent of the Actual Net Income-RLR, for the effect of fulfillment 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 incisos 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, increased by one percent a year, raising by four percentage points the limit of the commitment set in the previous incistion;

VII-in case 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 a percent of a percent 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 term, 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 additions to which the inciso VI refers are not subject to the RLR's commitment limit.

§ 4º The interest rate may be reduced to:

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

§ 5º The reduction to which it refers previous paragraph will be applied from the date of the integralization of the corresponding percentage of extraordinary amortization.

§ 6º Do not apply to the extraordinary amortization of which it treats § 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 to amortization of extraodynamic 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, the debtor balance will be recalculated, from the date of the signing of the contract, by changing the interest rate to:

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

II-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 debtor balance updated.

III-seven and a half percent, if the Municipality has committed itself in the form of the inciso II of the preceding paragraph the extraordinary amortization has reached ten percent of the updated debtor balance.

Art. 4º The public bonds issued after December 12, 1995, for payment of judicial precatories, pursuant to art. 33 of the Act of the Transitional Constitutional Provisions, may be the object of the assumption and refinancing to which the preceding Articles relate, observing this hypothesis, that the monthly instalment of the refinancing contract will correspond, in the minimum, to the benefit that would be due in respect of those securities, calculated by Table Price, for the period of one hundred and twenty months.

Single paragraph. It will not be covered by the assumption and the refinancing referred to in caput the furnishing debt in power of the issuer itself, even if via liquidity fund, or which has been placed on the market after December 31 of 1998.

Art. 5º For the purposes of application of 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 benefits shall not be lower than the value of the last instalment of the refinancing.

Art. 6º The amount effectively disbursed by the Municipality in respect of 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, may be deducted from the benefits calculated on the basis of Table Price, capped the monthly deduction at fifty per cent of the value of the first instalment.

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, observed the following:

I-will be excluded revenue from credit operations, cancellation of remains to be paid, of disposal of goods, of transfers linked to any title, of 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 financial surplus of the authorities and foundations, excluded those of the previdential character, will be considered as revenue realized for the purposes of calculating RLR.

Art. 8º The debt refinancing contract should provide that the Municipality:

I-will only be able to issue new securities of the domestic or external municipal furnishing debt, after the full settlement of the debt object of the refinancing provided for in this Interim Measution; and

II-will only be able to borrow 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 gaskets referred to in the inciso II:

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

II-the loans or financing from multilateral financial bodies and institutions of fostering and cooperation connected to foreign governments, which have a positive assessment of the funding agency, and to the National Bank of Economic Development and Social-BNDES, provided that contracted within the one-year period counted from June 30, 1999 and intended solely for the supplementation of ongoing programs.

Art. 9º The limit of commitment by RLR that it 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 a 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 The States, the Federal District and the Municipalities, until December 17, 1999, will be able to opt for the amortization of their debts to the National Social Insurance Institution-INSS, arising from social contributions, as well as those arising from ancillary obligations, up to the competence November 1999, upon employment of four percentage points of the Fund and Participation 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 them instituted and maintained, hypothesis in which there will be addition of three points in the FPE and three-point percentage in the FPM referred to in the caput.

§ 2º Mediant the employment of plus four percentage points of the respective Participation Fund, the units federatives referred to in this article will be able to choose to include, in this kind of amortization, debts constituted up to competence November 1999 towards the INSS, of its public companies and mixed economy societies, keeping up with the criteria for 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 authoritiable law state, 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 matching those limits, the percentage predicted 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, nHands and applies the provisions of the arts. 30, inciso I, paragraph (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 Law, 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 to 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 the revenue calculated as per the Supplementary Act No. 96 of May 31, 1999.? (NR)

Art. 17. The benefits held by Social Security will be retuned, at 1º June 2000, in five comma eighties and one percent.

Single paragraph. For the benefits granted by Social Security, as of 1º July 1999, the readjustment pursuant to the caput will give itself in accordance with the percentage indicated in the Annex to this Provisional Measure.

Art. 18. The devices ahead of Law No. 8,212, of July 24, 1991, go on to invigorate with the following essay:

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

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§ 10 The agreement concluded with the State, the District Federal or the Municipality, will 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 FPE or the Fund of Participation of the 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 previdionary municipality 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 the receipt of the respective 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 therein deposited 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. 102. The values expressed in current currency in this Act will be readjusted at the same times and with the same indices used for the readjustment of the Social Security's continued benefit benefits.

Single paragraph. Is the readjustment of the values of the wages-of-contribution due to the change in the minimum wage to be discounted when the application of the indices to which the caputrefers? (NR)

Art. 19. The devices ahead of Law No. 8,213, of July 24, 1991, go on to invigorate with the following essay:

?Art. 41. The values of the maintenance benefits will be retuned, as of 1º June 2001, by rata, according to their respective start dates or their last readjustment, based on percent defined in regulation, observed the following criteria:

I-preservation of the real value of the benefit;

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III-annual update;

IV -price variation of necessary and relevant products for the afferition of the maintenance of the purchase value of the benefits.

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§ 8º For the benefits that have suffered majoring due to the raising of the minimum wage, the said increase should be discounted when the application of the willing in the caput, according to standards to be lowered by the Social Welfare Ministerio.

§ 9º When of the ascertaining for fixing the percentage of the benefit readjustment, indices may be used which represent the variation of which treats the inciso IV of this article, disseminated by the Brazilian Institute of Geography and Statistics-IBGE or of congenne institution of recognized notoriety, in the form of the regulation. " (NR)

" Art. 96. ...................................................................................................................................

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IV-the previous or later service time to compulsory membership of Social Security only counted upon compensation of the contribution corresponds to the respective period, with additional interest rate moratons of zero comma five per cent per month, capitalised annually, and fine of ten per cent per cent per cent per cent per cent per cent per cent per cent per cent per cent one percent. " (NR)

" Art. 134. The values expressed in current currency in this Act will be readjusted at the same times and with the same indices used for the readjustment of the values of the benefits. " (NR)

Art. 20. The Law No. 9,717 of November 27, 1998, passes the force with the following amendments:

" Art. 1º .....................................................................................................................................

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

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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 shall be suspended, until December 31, 2000, the exigency of the provisions of § 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 penabilities, 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 Municipios shall provide the Ministry with Welfare to Social Assistency when requested, information on social welfare arrangements of social welfare and previdionary fund provided for in the art. 6º of this Law. " (NR)

Art. 21. 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. 22. 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 actions directly to the private welfare entities, from the competence of the month of December 1999, independent 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 Municipality in default of defaults of those with the Social Security System.

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

Art. 23. They are convaled to the acts the acts practiced on the basis of the Interim Measured No. 2.022-18 of June 21, 2000.

Art. 24. This Interim Measure shall come into force on the date of its publication.

Art. 25. Revoram the art. 101 of Law No. 8,212 of June 24, 1991, the § § 1º and 2º of the art. 41, the caput of the art. 95 and the arts.144 to 147 of Law No. 8,213 of June 24, 1991, the arts. 7º to 9º and 12 a to 17 of Law No. 9,711 of November 20, 1998 and the Provisional Measure No. 2.022-18 of June 21, 2000.

Brasilia, June 28, 2000; 179º of Independence and 112º of the Republic.

FERNANDO HENRIQUE CARDOSO

Pedro Malan

Waldeck Ornélas

ANNEX

RE-ADJUSTMENT FACTOR OF THE BENEFITS GRANTED ACCORDING TO THEIR RESPECTIVE START DATES

BENEFIT START DATE	READJUSTMENT (%)
until June / 1999	5.81
in July / 1999	5.31
in August / 1999	4.82
in September / 1999	4.33
in October / 1999	3, 84
in November / 1999	3.35
in December / 1999	2.86
in January / 2000	2.38
in February / 2000	1.90
in March / 2000	1.42
in April / 2000	0.95
in May / 2000	0.47