LAW 756 OF 2002

(July 23)

Official Journal No. 44.878 of 25 July 2002

By which Law 141 of 1994 is amended, distribution criteria are established and other provisions are dictated.

The Congress of Colombia

DECRETA:

ARTICLE 1o. The National Royalty Fund will have its own legal status, it will be attached to the National Planning Department and its resources will be allocated, in accordance with the article 361 of the National Constitution, the promotion of mining, environmental preservation and the financing of regional investment projects defined as priorities in the development of the respective territorial entities. The National Government within three (3) months following the enactment of this law, shall regulate the legal status of the National Royalty Fund and the aspects of it.

PARAGRAFO. The resources of the National Royalty Fund are the exclusive property of the territorial entities and will continue to be collected and administered by the National Treasury Directorate General of the Ministry of Finance and Public Credit.

ARTICLE 2o. The second paragraph of article 1or. Law 141 of 1994 will thus remain:

" Paragraph 2o. The total resources of the National Royalty Fund, once the allocations referred to in Article 1are discounted, article 5or. paragraph, article 8or. numeral 8, this percentage shall be raised to one per cent (1%) of the actual collections made by the National Royalty Fund, taking into account for its calculation the revenue for the immediately preceding six months and the estimated revenue projections for the following term, and in Article 30 of this Law, shall be used for the promotion of mining, preservation of the environment and the financing of regional investment projects, applying the following percentages at least: 15% for the promotion of mining, 30% for the preservation of the environment, 54% for the financing of regional investment projects defined as priorities in the development plans of the respective territorial entities. The third part of the resources allocated to the preservation of the environment will be used exclusively for the implementation of basic sanitation and sewerage projects, primarily in the areas of the country in which the provision of Such services are below the national average until they reach the average, where the resources will be used for the treatment and reuse of waste water. "

ARTICLE 3o. 1 of Law 858 of 2003. The new text is as follows: > Paragraph 4o of article 1or of Law 141 of 1994 will remain so:

PARAGRAFO 4o. One hundred percent (100%) of the resources for the promotion of mining should be applied in the terms of Article 62 of Law 141 of 1994. Of these, thirty percent (30%) will be executed by the Institute of Research and Information Geoscientific, Minero-Environmental and Nuclear, Ingeominas, fundamentally to the rise of the geological-basic cartography of the totality of the national territory in scale 1:100,000 (scale one in a hundred thousand). Seventy percent (70%) of the remaining National Mining Company, Minercol Ltda, or whoever does its own times, which will distribute it according to the priorities of the National Government and the development needs of the three (3) mining subsectors, to know: Metals and precious stones, minerals and industrial materials and energy minerals.

Of the annual resources administered by the National Mining Company, or who does its times, forty percent (40%) will be used to implement the special and community mining projects and those referred to in the article 62 of Act 141 of 1994. Territorial entities may be implementing projects for the promotion of mining, as long as they are approved by the mining authority, as follows: If they are developed within the jurisdiction of a municipality, they will be executed by the municipality; if cover the territory of more than one municipality, its execution shall be carried out by the respective department.

Territorial entities will be able to advance projects and program the promotion of mining directly, through agreements with other public bodies or through private contractors.

For the next five (5) years, counted from the sanction of this law, up to zero point three percent (0.3%) of the allocation of resources of the National Royalty Fund, intended for the promotion and promotion of small and Coal mining, projects will be co-financed for the rectification, improvement and adaptation of the road infrastructure in the area of coal influence of the departments of Boyaca, Cundinamarca, Antioquia and Norte de Santander ".

ARTICLE 4. The 2o paragraph. of article 9or. Law 141 of 1994 will thus remain:

" Paragraph 2o. It is defined as the Productor Department, whose income from royalties and compensations, including those of its producer municipalities, is equal to or greater than three percent (3%) of the total royalties and compensations generated by the country. No account will be taken of the National Royalty Fund's own resources allocations, nor those received by the departments as a product of the reallocations set out in Article 54 of Law 141. of 1994 ".

ARTICLE 5o. The numeral 1o. Article 10 of Law 141 of 1994 will thus remain:

" 1. Practice, directly or through delegates, inspection visits to the territorial entities benefiting from royalties and compensation and suspend the disbursement of them when the territorial entity has been found to be making use of the same in inefficient or inadequate way, until the situation is overcome ".

ARTICLE 6o. The paragraph paragraph of 5or. Law 141 of 1994 will thus remain:

" Paragraph. The National Royalty Commission will allocate 15% 5% (15.5%) of the Fund's annual revenues, for projects submitted by the territorial entities in accordance with the law and for the exclusive purposes of the Fund. prescribes article 361 of the Political Constitution, distributed as follows:

1. One point five percent (1.5%) for the department of Cordoba until 2010 inclusive, for regional investment projects defined as priorities in the respective development plans of the territorial entity.

2. The one point twenty-five percent (1.25%) to the municipalities of the area of environmental influence of the cement factories, distributed proportionally according to the volume of production of each one of them, destined to the preservation of the environment environment.

3. One per cent (1%) to the municipalities in the area of environmental influence of steelmakers and steel mills, distributed proportionally according to the volume of production of each of them, with a view to the preservation of the environment.

4. In place of the obligations laid down in Articles 3o, 4. and 5o. Decree 1246 of 1974, the two-point seventy-five percent (2.75%) for the municipalities where petrochemical refining processes of crude and/or gas are carried out, distributed proportionally according to their volume, destined for the preservation of the environment the environment and the execution of the development works defined in article 15 of Law 141 of 1994.

5. One point twenty-five percent (1.25%) to the metropolitan area of Barranquilla Municipality destined for the residual decontamination of the waters of the Magdalena River in that area.

6. One point twenty-five percent (1.25%) to the municipality of Buenaventura, destined for the decontamination of the environment in that municipality.

7. Zero point five percent (0.5%) destined for the residual decontamination of the waters of the Tumaco Bay and the defense of the ecosystem starting in its basin extends to the Paramo of the Popes.

8. Zero percentage point 25 percent (0.125 percent) to the municipality of Caucasia, destined for the decontamination of rivers where gold is exploited.

9. Zero percentage point 25 percent (0.125%) for the municipality of Ayapel, destined for the preservation and decontamination of the morass.

10. Zero percentage point 25 percent (0.125%) distributed as follows: For the municipality of Pasto (Narino), thirty percent (30%) and for the municipality of Aquitaine (Boyaca), seventy percent (70%), destined for conservation, preservation and Decontamination of the waters of the Cocha Lagoon and Lake Tota.

11. Zero point twenty-five percent (0.25%) with destination, in equal parts, for the municipalities comprised between the jurisdictions of the Natural Parks, of the Nevados del Ruiz, Santa Isabel, Quindio, Tolima and Central; for the preservation, conservation and decontamination of the environment.

12. Zero point 25 percent (0.125%) for the municipality of Lorica, destined for the preservation and decontamination of the Cienaga Grande.

13. Zero point 25 percent (0.125%) for municipalities between the jurisdictions of the Laguna de Fuquene for the preservation, conservation and decontamination of the lagoon.

14. Zero point twenty-five percent (0.25%) for the municipality of Puerto Boyaca for the preservation of the environment.

15. One percent (1%) distributed as follows: zero point five percent (0.5%) destined for the department of Choco to recover the areas affected by the mining of the barequeo and for the promotion of small mining, and zero point five percent (0.5%) destined for the departments of Vaupes and Guainia for the same purposes.

16. Zero point twenty-five percent (0.25%) for the departments of Antioquia, Narino and Risaralda for the promotion of gold mining projects in the gold-producing municipalities.

17. The zero point eight hundred and seventy-five percent (0.875%) up to the year 2010 inclusive, for the department of Sucre, destined for the decontamination and channeling of the creeks and canoes.

18. Zero point fifty percent (0.50%) to the municipalities of Chimichagua, Chiriguana, Curumani, Tamalameque, Cesar department, and El Banco, Magdalena department, by parts proportional to their territorial participation in the system For the conservation, preservation and decontamination of the Cienaga del Zapatosa.

19. Zero point fifty percent (0.50%) for the municipality of Monteria until 2010 inclusive, destined for projects: investment priorities, preferentially basic sanitation.

20. Zero point fifty percent (0.50%), for the municipality of Neiva, Huila, destined for the recovery and preservation of the river basin Las Ceibas.

21. Zero point five percent (0.5%) for environmental improvement projects and infrastructure for small and medium coal and gold mining areas in the department of Antioquia.

22. Zero point five percent (0.5%) for the recovery of the Guaitiquia river dam in the city of Villavicencio, resources that will have to be executed by the department's governor.

The area of environmental influence will be that defined by the Environment Ministry.

The provisions of this article do not in any way exempt the polluters from repairing the damage caused to the environment or the performance of their environmental obligations. "

ARTICLE 7o. The 5o paragraph. of article 1or. Law 141 of 1994 will thus remain:

" Paragraph 5o. The two thirds (2/ 3) of the resources allocated to the preservation of the environment will have the following destination:

1. Not less than 20% (20%) will be channelled towards the financing of environmental sanitation in the Amazon, Choco, San Andrés Archipelago, Providencia and Santa Catalina, the Cienaga Grande de Santa Marta, the Sauso Lagoon in the Valley of the Cauca, the Guajaro reservoir in the Atlantic, the Tayrona National Park, the Tota Lagoon and the Cienaga de Sapaya, and the environmental sanitation and sustainable development of indigenous guard lands located in areas of special significance environmental.

2. Not less than twelve per cent (12 per cent) for the recovery and conservation of river basins across the country. The sixth part of this 12% will be applied for the financing of research projects, management and development of dry areas and the fight against desertification and drought affecting territorial entities and/or Autonomous Corporations. Regional.

3. Not less than twenty-one percent (21%) to finance programs and projects for the decontamination of the Bogota River.

4. Not less than three percent (3%) for the decontamination of the Cauca River. These resources will be used exclusively to contribute to the payment of the debt service of the project PTAR Canaveralejo until it is covered. In their absence, these resources will be used to finance the complementary works that will allow to treat one hundred percent (100%) of the wastewater in the city of Santiago de Cali.

5. Not less than two points five percent (2.5%) for decontamination, preservation and for the reconstruction and environmental protection of the area of La Mojana.

6. Not less than seven percent (7 percent) for the preservation and environmental protection of renewable natural resources in the Colombian Massif. Of these, two percent (2 percent) will be assigned to the environmental projects that the Regional Autonomous Corporations will advance in the departments of Cauca, Huila, Narino, Tolima, Caqueta, Putumayo, and Valle, and the surplus, that is, five percent. (5%), for municipalities located in the Colombian Massif in the departments of Cauca, Huila and Narino, under the coordination of environmental policy for the Colombian Massif. The projects will be implemented by the municipalities.

7. Not less than one point five percent (1.5%) for the municipality of San Fernando and zero point five percent (0.5%) for the municipality of Santa Rosa del Sur, for the financing of environmental recovery projects department of Bolivar.

8. Zero point five percent (0.5%) for the department of Sucre for the conservation and decontamination of the San Benito Abad, Caimito and San Marcos Cienagas.

9. Zero point five percent (0.5%) for the protection, preservation, reforestation and decontamination of the rivers Cusiana, Charte, Upia, Juneña, Cravo Sur, Tocaria, Pauto, Ariporo, Tua, Casanare, and for the basic sanitation of urban centers influence.

10. The surplus, up to a hundred percent (100%), will be allocated to the financing of environmental projects that advance the Regional Autonomous Corporations in the territorial entities, and will be distributed as follows:

(a) Not less than forty-five percent (45%) of these resources, for the projects presented by the municipalities of the jurisdiction of the fifteen (15) Regional Autonomous Corporations of lower tax revenues in the budget previous;

(b) Not less than 25% (25%), for projects submitted by the municipalities of Regional Autonomous Corporations with special schemes;

c) The surplus to 100% (100%), for environmental projects in municipalities belonging to the Regional Autonomous Corporations other than the previous ones ".

ARTICLE 8o. 160 of Law 1530 of 2012. View Vigency Notes >

ARTICLE 9o. 160 of Law 1530 of 2012. View Vigency Notes >

ARTICLE 10. When, for the first time, it is started to transport non-renewable natural resources and their derivatives by a port municipality, maritime or river municipality, the National Royalty Commission, prior to study and The Ministry of Mines and Energy's concept will make the respective distribution of royalties and compensations caused, in accordance with the criteria of article 29 of Law 141 of 1994. The Commission shall establish whether the area of influence by the loading and unloading of these resources shall cover other neighbouring municipalities and shall therefore have them as beneficiaries of the respective distribution.

PARAGRAFO. The royalties assigned to the river port of Barrancabermeja and its area of influence, will be distributed as follows:

Barrancabermeja, Santander	57.5%
Wilches Port, Santander	7.5%
St. Paul, Bolivar	7.5%
Cantagallo, Bolivar	7.5%
Yondo, Antioquia	20%

ARTICLE 11. When in an indigenous guard or at a point located no more than five (5) kilometers from the area of the indigenous guard, non-renewable natural resources are exploited, five percent (5%) of the value of the royalties corresponding to the department for that exploitation, and twenty percent (20%) of those corresponding to the municipality, will be assigned to investment in the areas where the indigenous communities are settled and will be used in the terms established in article 15 of Law 141 of 1994.

PARAGRAFO. When the indigenous guard is a territorial entity, it will be able to receive and execute the resources directly, in a different case, the resources will be received and executed by the municipalities in consultation with the indigenous authorities by the respective municipality, having regard to the provisions of this Article.

ARTICLE 12. For the purposes of the liquidation of the carboniferous royalties, and in order to avoid artificial fractionations in the mining companies, the liquidation will be made on the total production that corresponds to the titles or mining contracts of the same holder, applying the volumes and percentages set out in Article 16 of Law 141 of 1994.

ARTICLE 13. Article 14 of Law 141 of 1994 will remain so:

" Article 14. Use by the departments of the units established in this law:

The royalty and monetary compensation resources distributed to the producer departments will have the following destination:

(a) 90% (90%), investment in priority projects which are covered by the department's overall development plan or in the development plans of its municipalities, and of these, not less than 50% (50%) priority projects which are covered by the development plans of the municipalities of the same department, which do not receive direct royalties, of which more than 15% (15%) may not be allocated to the same municipality. In any case, priority will be given to projects benefiting two or more municipalities;

b) Five percent (5%), for the technical intervention of projects to be implemented with these resources, and

c) Five percent (5%), for operating or operating expenses. Fifty percent (50%), and only when these resources do not come from hydrocarbon projects, to cover the costs of management and administration that the national law entities have at the expense of the collection and distribution function. of royalties and compensation.

As long as the departmental entities do not reach minimum coverage in infant mortality indicators, basic health and education coverage, drinking water, and sewer, the corresponding departmental entity must allocate no less than Sixty percent (60%) of the total of their royalties for these purposes. The annual budget will clearly separate the resources from royalties to the sectors mentioned here.

The National Government will regulate the minimum coverage.

PARAGRAFO 1o. For the purposes of this article, the transfers made by the departments of the royalties and compensation units in favor of the Regional Councils of the Economic and Social Planning, Corpes, or the entity that replaces them, and the Regional Investment Funds, FIR.

PARAGRAFO 2o. All transfers of participations to public entities that under previous laws, decrees and conventions will continue to be in force, have been carried out by the departments and municipalities.

PARAGRAFO 3o. For all intents and purposes, the Comptroller General of the Republic shall exercise fiscal control over these resources. "

ARTICLE 14. Article 15 of Law 141 of 1994 will remain so:

" Article 15. Use by the municipalities of the units established in this law.

The resources of royalties and monetary compensation distributed to the producing municipalities and the port municipalities, will have the following destination:

a) 90% (90%) investment in municipal development projects contained in the development plan, with priority for those aimed at environmental sanitation and for those destined for the construction and expansion of the structure of health services, education, electricity, drinking water, sewerage and other essential basic public services, without prejudice to the provisions of article 129 of the Mining Code (Law 685 of 2001);

b) Five percent (5%) for the technical intervention of projects that run with these resources, and

c) Five percent (5%) for operating or operating expenses. Fifty percent (50%), and only when these resources do not come from hydrocarbon projects, to cover the costs of management and administration that the national law entities have at the expense of the collection and distribution of royalties and compensation.

As long as municipal entities do not reach minimum coverage in the sectors indicated, they will allocate at least seventy-five percent (75%) of the total of their units for these purposes. The annual budget shall clearly separate the resources from the royalties for the preceding purposes.

The National Government will regulate the minimum coverage.

PARAGRAFO. For all intents and purposes, the Comptroller General of the Republic shall exercise the fiscal control of these resources. "

ARTICLE 15. The 1o paragraph. Article 29 of Law 141 of 1994, shall be as follows:

" Paragraph 1o. The royalties and compensation caused by the transport of non-renewable natural resources or their derivatives, by the municipalities seaports in the departments of Cordoba and Sucre will be distributed within the next area of influence so:

a) For Sucre department municipalities	50%
b) For the municipalities of the Department of Cordoba	50%
Total a) + b) =	100%

All of these resources must be invested by the territorial entities benefited under the terms of Article 15 of Law 141 of 1994.

50% (50%) corresponding to the municipalities of the department of Sucre will be directly rotated as follows:

1. Eight percent (8%) for the maritime port municipality of the department of Sucre where the non-renewable natural resources or their derivatives are transported.

2. Six points five percent (6.5%) for the municipality of Santiago de Tolu.

From the validity of this law and during the first three years, divided in semesters, the percentages that will be distributed to the marine harbour municipality of the department of Sucre where the natural resources are transported renewable or its derivatives, and the municipality of Santiago de Tolu, will be the following:

Year 1		Year 2	Year 3
Semester 1		Semester 2	Semester 3	Semester 4	Semester 5	Semester 6
Port Municipality	6.5%	6.5%	7.0%	7.0%	7.5%	8.0%
Santiago de Tolu coastal municipality	8.0%	8.0%	7.5%	7.5%	7.0%	6.5%

The three percent (3 percent) of the resources corresponding to the municipalities of Sucre will be turned directly by the collecting entity to the department of Sucre, who will have to allocate them for the financing of the decontamination programs of the canos and creeks located in their territorial area, with special emphasis on the Arroyo Grande de Corozal as well as for the maintenance of its micro-basins.

In the event that the maritime port municipality of the department of Sucre where the non-renewable natural resources are transported or its derivatives disappear from the legal order and the municipality of Santiago de Tolu will recover its status of port municipality, corresponding royalties will be distributed as follows:

The fourteen point five percent (14.5%) for the maritime port municipality of the department of Sucre where natural resources or their derivatives are transported.

Of this fourteen point five percent (14.5%), the third part will have to be invested within the area of influence of the port, in the municipality of Covenas, which will be handled in separate account. Failure to comply with this mandate is a cause of misconduct, sanctioned with removal.

3. Three percent (3%) in an egalitarian way among the remaining maritime port municipalities of the department of Sucre in the Gulf of Morrosquillo, with the exception of the municipality of Santiago de Tolu.

The surplus to completion of 50% (50%), i.e. the twenty-nine point five percent (29.5%) will be distributed among the remaining municipalities of the department of Sucre not covered by the previous incisents, nor producers of large mining, using the following weighting mechanisms:

a) Twenty-five percent (25%) will be distributed equally, among all the municipalities of the department, not referred to in the previous paragraph, nor producers of large mining;

b) Thirty-two-point five percent (32.5%) of the same allocation will be distributed proportionally based on the population census of each beneficiary municipality;

c) The remaining forty-two-point five percent (42.5%) will be distributed in relation directly proportional to the number of inhabitants with basic unmet needs of each beneficiary municipality.

To obtain the figures to be distributed among the municipalities, the following formula will be used:

RCM	=	T * [(0.25/NoM) + 0.325 (PM/PT) + 0.425 PMNBI/PTNBI)]
RCM	=	Resources for each municipality.
T	=	Total resources to distribute.
PT	=	Total population municipalities to benefit.
PM	=	Population of the municipality.
PTNBI	=	Total population with NBI of municipalities to benefit.

The proportionality used in relation to the population and the basic unmet needs will be given by reason of the sum that they throw the beneficiary municipalities, excluding the data of the marine harbour municipality of the department of Sucre where the non-renewable natural resources or their derivatives are transported and the other maritime port municipalities of the department of Sucre in the Gulf of Morrosquillo.

50% (50%) corresponding to the municipalities of Cordoba will be directly rotated as follows:

1. Eleven point five percent (11.5%) for the port and maritime municipality of Cordoba where the non-renewable natural resources or their derivatives are transported.

2. Nine percent (9.0%) in equal form among the remaining maritime port municipalities of the department of Cordoba.

3. Twenty-seven-point five percent (27.5%) in equal form among the remaining municipalities of the department of Cordoba not covered by the previous incissos or producers of large mining.

4. The surplus to completion of fifty percent (50%), that is, two percent (2%), destined for the department of Cordoba to be transferred to the Autonomous Corporation of the Valleys of the Sinu and the San Jorge "CVS" for reforestation.

In the event that I will become a department (Cordoba or Sucre), two (2) or more maritime port municipalities, for which the non-renewable resources or their derivatives are transported, the percentage allocated to them municipalities shall apply to the volumes transported by each of them.

The staggering set out in Article 53 of Law 141 of 1994, will be applied independently by each port municipality where the hydrocarbons or their derivatives are transported.

Of the amount or total amount of royalties and compensation that the present paragraph deals with, each municipality will be deducted the sums that the Colombian Petroleum Enterprise, Ecopetrol, or the Nation has delivered or will deliver to them as a loans or advances ".

ARTICLE 16. AMOUNT OF ROYALTIES. Article 16 of Law 141 of 1994 will thus remain:

" Article 16. Establish as a royalty for the exploitation of non-renewable natural resources of national ownership, on the value of the production on the mouth or edge of mine or well, as appropriate, the percentage that results from applying the following table:

Coal (exploitation greater than 3 million tons annually)	10%
Coal (operating less than 3 million tons annually)	5%
Nickel	12%
Iron and Copper	5%
Gold and Silver	4%
Flood gold in concession contracts	6%
Platinum	5%
Salt	12%
Calis, yeses, clays and gravel	1%
Radioactive Minerals	10%
Metal Minerals	5%
Non-metallic Minerals	3%
Build Materials	1%

Set as a royalty for the exploitation of national property hydrocarbons on the value of the well-mouthed production, the percentage that results from applying the following scale:

daily production month	Percentage
For production equal to or less than 5 KBPD	8%
For production greater than 5 KBPD and less than or equal to 125 KBPD	X%
Where X = 8 + (production KBPD-5 KBPD) * (0.10)
For production greater than 125 KBPD
and less than or equal to 400 KBPD	20%
For production greater than 400 KBPD
and less than or equal to 600 KBPD	Y%
Where Y = 20 + (KBPD Production-400 KBPD) * (0.025)
For production greater than 600 KBPD	25%

PARAGRAFO 1o. For all purposes, "production KBPD" means the average daily production month of a field, expressed in thousands of barrels per day. For the calculation of royalties applied to the exploitation of gaseous hydrocarbons, the following equivalence shall apply:

One (1) barrel of oil is equivalent to five thousand seven hundred (5,700) cubic feet of gas.

The royalty regime for gas exploitation projects will remain so:

For exploitation in fields located on dry land and offshore up to a depth of less than or equal to one thousand (1,000) feet, eighty percent (80%) of the equivalent royalties for the exploitation of crude oil will be applied; fields located offshore at a depth of more than 1,000 (1,000) feet, a royalty of sixty percent (60%) of royalties equivalent to the exploitation of crude oil will be applied.

PARAGRAFO 2o. This rule will be applied for new hydrocarbon discoveries in accordance with article 2or. of Law 97 of 1993, or the rules that supplement, replace or repeal it, which are carried out after the date of enactment of this law.

PARAGRAFO 3o. This provision will also apply to incremental production from the incremental production contracts previously approved by the Ministry of Mines and Energy and the fields discovered not developed. Incremental production will be understood to be from the contracts signed by Ecopetrol with third parties that aim to obtain from the fields already existing, new reserves coming from new investments oriented to the application of technologies, for the improved recovery in the subsoil that increase the factor of recovery of the deposits, or for the addition of new reserves. Incremental production will also be understood as the projects advanced by Ecopetrol for the same purposes.

PARAGRAFO 4o. The percentage of royalties and compensations agreed in the current contract for the exploitation of nickel in Cerromatoso, Montelibano municipality, will apply the first four percent (4%) to royalties and the 4% (4%) remaining to compensation. For future contracts or carryovers, if any, the percentage of royalties set out in this article will be applied and distributed as follows: Seven per cent (7 per cent) per royalty and five per cent (5 per cent) remaining, to compensation.

PARAGRAFO 5o. In the association agreement between Carbool and Intercor, the legal royalty will be 15% (15%) by Intercor or by the acquiring company of its shares, as stipulated by the contract, which will be distributed as set out in article 32 of this law. In the event that the company Carbocol is liquidated, privatized, or is the subject of a private capitalization process, the entity that acquires the company's rights will have to pay 10 percent (10 percent) of the value of the production in mine mouth, which will be liquidated: the first five percent (5%) will be applied as royalties and will be distributed in the terms of article 32 of this law; the remaining five percent (5%) will be applied as compensation to be distributed as follows: fifty percent (50%) for the Corporation Regional Autonomous Region in whose territory the holdings are carried out; 25% (25%) for the administrative region of planning or the region as a territorial entity to which the respective department belongs, and 25% (25%) for the coal-producing municipalities of the same department. The settlement, collection and distribution of these royalties and compensation is the responsibility of the Ministry of Mines and Energy or the entity that is delegated.

While creating the Planning Administrative Region or the region as a territorial entity, the resources allocated to it shall be administered and implemented by the Regional Autonomous Corporation on whose territory the holdings are made.

PARAGRAFO 6o. The tax stipulated in the contracts or licenses in force for the exploitation of coal will be replaced by a royalty whose amount will be equal to that of the tax, in charge of the contractor, concessionaire or exploiter.

PARAGRAFO 7o. In cases in which the integration of mining small mining titles is operated before 31 December 2005, the holders of such integration will be obliged to pay during the twenty-five years. (25) years after the date of the same, thirty percent (30%) of the total percentage of royalties and compensation to which they are bound by this law.

PARAGRAFO 8o. For the purposes of liquidating the royalties for the exploitation of salt mines, the price of the product will be taken, net of freight rates and costs of processing. It will be taken for the price of realization, the sale price of the Concession Salinas or the company that will do its times.

PARAGRAFO 9o. The value of gram gold, silver and platinum in mine mouth to liquidate the royalties, will be eighty percent (80%) of the average international price of the last month, published by the London Metal Exchange in its version Pasado Meridiano.

PARAGRAFO 10. For the exploitation of heavy hydrocarbons of an API gravity equal to or less than fifteen degrees (15o), the royalties will be seventy-five percent (75%) of the applied regalia for light hydrocarbons and semilivianos. This provision will apply to production coming from new discoveries, incremental production contracts, or undeveloped discovered fields.

ARTICLE 17. Article 62 of Law 141 of 1994 is added to the following paragraph:

" Paragraph. For the purposes of this law, it will also be understood as a promotion of mining, which is done through the transfer of resources from royalties, preferably for the projects of integration of small titles. mining, given their social, economic and environmental conditions, in order to make such projects, a sustainable mining ".

ARTICLE 18. For the purposes of this law, however, there will be no differences between different production volumes in the current mining legislation, which will be understood by small mining projects. following:

a) For metals and precious stones. When the total capacity for extraction of useful and sterile materials per year is up to two hundred and fifty thousand cubic meters (250,000 mts3), if it is open pit mining, or up to eight thousand tons (8,000 tons), if it is mining underground;

b) For coal. When the total capacity for extraction of useful and sterile materials per year is up to twenty-four thousand tons (24,000 tons) of coal, if it is open-pit mining, or up to thirty thousand tons (30,000 tons) of coal, if it is underground mining;

c) For building materials. When the total capacity for extraction of useful and sterile materials per year is up to ten thousand cubic meters (10,000 mts3) of material if it is open pit mining, or up to thirty thousand tons (30,000 tons) of material if it is underground mining.

For other materials not included in the above literals: When the total capacity for extraction of useful and sterile materials per year is up to one hundred thousand tons (100,000 tons) of material, whether it is open pit mining, or even Thirty thousand tons (30,000 tons) of material, if it is underground mining.

ARTICLE 19. Article 17 of Law 141 of 1994 will remain so:

" Article 17. Royalties corresponding to emeralds and other precious stones. The royalties corresponding to the holding of emeralds and other precious stones shall be one point five per cent (1.5%) of the value of the exploited material put on the mouth or edge of the mine, shall be settled by the Ministry of Mines and Energy or by the entity that it designates and shall declare and pay in accordance with the distribution set out in Article 35 of this Law. "

ARTICLE 20. Article 35 of Law 141 of 1994 will remain so:

" Article 35. Distribution of royalties derived from the exploitation of emeralds and other precious stones.

Cundinamarca Department	10%
Boyaca Department	10%
Muzo Township	6%
Quipama Township	6%
San Pablo de Borbur Municipality	6%
Maripi Township	6%
Pause Township	6%
Good View Township	3%
Otanche Township	5%
Coper Township	3%
Briceno Township	3%
Tunungua Township	3%
La Victoria Township	3%
Chivor Township	6%
Macanal Township	3%
Almeida Township	3%
Somondoco Township	3%
Chiquinquira Municipality	3%
Caldas Township	2%
Ubala Township	3%
Gachala Township	3%
Guveta Municipality <Guayata >	2%
National Royalty Fund	2%
Total	100% "

ARTICLE 21. Article 43 of Law 141 of 1994, will remain so:

" Article 43. Distribution of monetary compensation arising from the exploitation of emeralds and other precious stones. Monetary compensation resulting from the exploitation of emeralds and other precious stones shall be distributed as follows:

Cundinamarca Department	10%
Boyaca Department	10%
Muzo Township	6%
Quipama Township	6%
San Pablo de Borbur Municipality	6%
Maripi Township	6%
Pause Township	6%
Good View Township	3%
Otanche Township	5%
Coper Township	3%
Briceno Township	3%
Tunungua Township	3%
La Victoria Township	3%
Chivor Township	6%
Macanal Township	3%
Almeida Township	3%
Somondoco Township	3%
Chiquinquira Municipality	3%
Caldas Township	2%
Ubala Township	3%
Gachala Township	3%
Guveta Municipality <Guayata >	2%
National Royalty Fund	2%
Total	100% "

ARTICLE 22. 41 of Law 141, 1994, will be as follows:

Article 41. Distribution of monetary compensation arising from the exploitation of nickel. The monetary compensation provided for in the contracts for the exploitation of nickel shall be distributed as follows:

Producers Departments	42.0%
Producers or Producer Districts	2.0%
Port Municipalities or Districts	1.0%
Autonomous Corporation
whose territory the exploitation is performed	55.0%

PARAGRAFO. The monetary compensation for the exploitation of nickel assigned to the department of Cordoba as a producer department, will be distributed among the non-producing municipalities of the San Jorge area. so:

Liberator Port Municipality	9.0%
Ayapel Township	8.0%
of Planet Rica	8.0%
Town Township	7.0%
Buenavist Municipality	5.0%
Municipality of The Appearance	5.0%
Total	42.0%	"

ARTICLE 23. Article 49 of Law 141 of 1994 will remain so:

Article 49. Limits to the participation in royalties and compensation from the exploitation of hydrocarbons in favor of the producer departments. To the shares in royalties and compensations arising from the exploitation of hydrocarbons in favour of the producer departments, without prejudice to the provisions of paragraph 2o. of Article 14 and in Article 31 of Law 141 of 1994, the following step shall apply:

Monthly Average Barrels/Day departments	Participation over your percentage
For the first 180,000 barrels	100%
More than 180,000 and up to 600,000 barrels	10%
Over 600,000 barrels	5%

PARAGRAFO 1o. When production is greater than one hundred and eighty thousand (180,000) barrels daily average monthly, the excess royalty and compensation resulting from the application of this item will be distributed as follows: sixty-five percent (65%) for the National Royalty Fund and thirty-five percent (35%) to be used in accordance with the provisions of Article 54 of Law 141 of 1994. From the resources that this concept receives the National Royalty Fund not less than five percent (5%) to fund irrigation district projects and the electrification project in the Casanare department.

PARAGRAFO 2o. The steps referred to in this Article shall not apply to contracts whose fields were declared commercial before the entry into force of the Political Constitution of 1991.

ARTICLE 24. Article 50 of Law 141 of 1994 will remain so:

Article 50. Limits to the participation in royalties and compensation from the exploitation of hydrocarbons in favor of the producing municipalities. To the shares in royalties and compensations arising from the exploitation of hydrocarbons in favour of the producing municipalities, without prejudice to the provisions of paragraph 2. of Article 14 and in Article 31 of Law 141 of 1994, the following step shall apply:

Monthly Average Barrels/Day departments	Participation over your percentage
For the first 100,000 barrels	100%
Over 100,000 barrels	10%

PARAGRAFO 1o. For the application of items 31, 49 , and 50 of this law, a barrel of oil is equivalent to five thousand seven hundred cubic feet (5,700 pies3) of gas. For the economic purposes of the above articles, in the case of gas exploitation, the provisions of the first paragraph of Article 16 of Law 141 of 1994 shall be taken into account.

PARAGRAFO 2o. When production is greater than one hundred thousand (100,000) barrels per day, the surplus of royalties and compensation resulting from the application of this article will be distributed as follows: 40 percent (40%) for the National Royalty Fund and sixty percent (60%) to be used as set out in Article 55 of Law 141 of 1994.

PARAGRAFO 3o. The steps referred to in this Article shall not apply to contracts whose fields were declared commercial before the entry into force of the Political Constitution of 1991. "

ARTICLE 25. Modify paragraph 2o. and add paragraph 4. of article 3or. of Law 141 of 1994, as follows:

PARAGRAFO 2o. For the purposes of this law, it is understood as a regional project those that when executed, benefit groups of municipalities from different departments or the same department.

For the case of road investments, the Archipelago department of San Andrés, Providencia and Santa Catalina are excepted, who will be able to define the type of route to which they will apply their investment.

PARAGRAFO 4o. The National Royalty Commission, in accordance with article 10 numeral 2 of Law 141 of 1994, in order to monitor and monitor the correct use of the royalties and compensation in the terms of Articles 14 and 15 of the said law, may provide for the hiring of financial and administrative interventories with public entities or with private firms or entities, to monitor the use of the participation of royalties and compensation from the respective territorial entities. The value of these contracts cannot exceed one percent (1%) of these resources.

The National Royalty Commission will ask the collecting entity to discount this concept.

ARTICLE 26. Article 19 of Law 141 of 1994 will remain so:

" Article 19. In the liquidation of royalties and compensations derived from the exploitation of non-renewable natural resources, the conversion of foreign currency to Colombian pesos will be made on the basis of the representative exchange rate of the market. average of that currency in the semester, quarter, month or month that is settled. "

ARTICLE 27. Article 31 of Law 141 of 1994 will remain so:

" Article 31. Distribution of royalties derived from the exploitation of hydrocarbons. Without prejudice to the provisions of Articles 48, 49 and 50 of this Law, royalties arising from the exploitation of Hydrocarbons shall be distributed as follows:

TABLE 1

Producers Departments	47.5%
Producers or producer districts	12.5%
Port Municipalities or Districts	8.0%
National Royalty Fund	32.0%

PARAGRAFO 1o. In case the total production of a municipality or district is less than ten thousand (10,000) barrels daily average daily, the corresponding royalties will be distributed as follows:

TABLE 2

Producers Departments	52%
Producers or Producer Districts	32%
Port Municipalities or Districts	8%
National Royalty Fund	8%

In case the total production of a municipality or district is greater than ten thousand (10,000) barrels, and less than twenty thousand (20,000) barrels daily average monthly, the royalties corresponding to the surplus over the ten thousand (10,000) barrels daily average monthly, will be distributed as follows:

TABLE 3

Producers Departments	47.5%
Producers or Producer Districts	25%
Port Municipalities or Districts	8%
National Royalty Fund	19.5%

PARAGRAFO 2o. When the total hydrocarbon production of a municipality or district is over twenty thousand (20,000) and less than fifty thousand (50,000) barrels daily average monthly, the royalties corresponding to the Twenty thousand (20,000) barrels will be distributed according to the previous paragraph and the surplus in the form set out in Table 1 of the same.

ARTICLE 28. Article 36 of Law 141 of 1994 will remain so:

" Article 36. Distribution of royalties derived from the exploitation of gold, silver and platinum. Royalties for the exploitation of gold, silver and platinum will be distributed as follows:

Producer Department	10%
Producers or Producer Districts	87%
National Royalty Fund	3%

ARTICLE 29. Article 48 of Law 141 of 1994 will remain so:

" Article 48. Distribution of compensation resulting from the exploitation of hydrocarbons. Monetary compensation derived from the exploitation of hydrocarbons shall be distributed as follows:

Producers Departments	22%
Producers or Producer Districts	10%
Port Municipalities or Districts	8%
	Industrial and Commercial Enterprise, Ecopetrol, or who does your times	50%
Autonomous Corporation in whose territory holdings are made	10%

ARTICLE 30. AFOROS. 75 of Law 962 of 2005 >

ARTICLE 31. REVIEW OF AFORA. 75 of Law 962 of 2005 >

ARTICLE 32. LACK OF CAPACITY. 75 of Law 962 of 2005 >

ARTICLE 33. SOURCE STATEMENT. 75 of Law 962 of 2005 >

ARTICLE 34. BUDGET. The annual budget of the National Royalty Fund may in no case be less than the sum of the actual revenue for the year plus the financial returns.

ARTICLE 35 TRANSIENT. Seventy percent (70%) of the resources that are dealt with in Article 361 of the Political Constitution, which are being administered by the Directorate General of the National Treasury and which have not been appropriate in the National Fund of Royalties to December 31, 2001, will be used in its entirety and exclusively for the financing of investment projects aimed at covering the liabilities (a) a pension scheme for local authorities, through the Territorial Pension Fund, Fonpet.

These resources must be administered by the National Treasury Department of the Ministry of Finance and Public Credit, in a separate and special account, until they are transferred to their administration in accordance with the established in Law 549 of 1999 or the rule that modifies or adds it, in the form and opportunity established by the National Government. The financial returns generated by the transitional administration carried out by the Directorate General of the National Treasury belong to the Fonpet.

The distribution of the resources referred to in this article and the requirements for accessing them shall be made in accordance with the regulations that the National Government will adopt for the purpose.

PARAGRAFO 1o. 1 of Law 859 of 2003. The new text is as follows: > For only one time, the remaining percentage of the 30% (30%) of the resources referred to in the first paragraph of this Article, discounted the participations referred to in the second and second paragraphs third of this Article, they shall be intended as follows:

(a) 90% (90%) exclusively for the payment of the debt in force by June 30, 2002, duly recognised and caused by the supply of electricity and public lighting services, to the territorial entities, as well as to the educational establishments, health institutions, aqueduct and basic sanitation companies, which are wholly dependent on or are in charge of such territorial entities.

The utilities of the electric power and street lighting service that access the resources provided in this law will have to write down the entire interest of arrears and up to fifty percent (50%) of the interest the current territorial authorities and their decentralised institutes due for energy service.

The distribution of the resources referred to in this literal will be carried out by the Ministry of Mines and Energy on the basis of the certifications signed by the legal representatives of the territorial entities or entities. decentralised, and the creditor companies. These companies and the territorial entities will be responsible for the veracity and materiality of the figures reported in the certifications.

From the debts certified to June 30, 2002, the credits that have been made after this date must be discounted.

The resources must be turned directly to the creditors by the National Royalty Commission in accordance with the distribution by the Ministry of Mines and Energy;

b) The remaining ten per cent (10 per cent) will go exclusively to electrically normalising the rural and urban sectors of invasion, subnormal and displacement.

The energy distribution companies in each region will have to provide free title to the technical intervention designs for the execution of the respective electrical normalization projects. This will be an essential requirement for the allocation of resources. Electrical standardisation projects may include the connection to the user's home, including the meter or system for measuring consumption.

The authorities of the territorial entities according to their respective competence will have a period of thirty (30) calendar days, following the entry into operation of the respective project of electrical normalization, to issue the (a) the necessary administrative arrangements for the respective stratum to be provisionally or definitively allocated in order for the energy distribution company to be able to individually invoice the consumption of each user.

The non-issuance of the administrative acts of provisional or definitive stratification will be causal of misconduct and will force the territorial entity to pay the respective invoice that the energy distribution company presents without detriment of the repeat actions to take place because of this omission.

Consider as a social investment the expenses referred to in this Article.

PARAGRAFO. The transfer of monies by the National Royalty Commission to entities referred to in paragraph 1 (a) of Article 1or the present shall not cause any cost of financial audit; by exceptional control the Comptroller General of the Republic shall exercise this cost.

PARAGRAFO 2o. The one percent (1%) of the resources that the 1o paragraph treats. will be used for the arrangement of secondary and tertiary roads in the department of Santander, with the construction of the Chiriviti bridge, between the municipalities of Galán and Zapatoca.

PARAGRAFO 3o. 3% (3%) of the resources in question in paragraph 1 will be used for the implementation of basic sanitation and sewerage and regional development projects in the municipalities of Bojaya and its areas of influence, department of Choco and the municipality of Vigia del Fuerte and its areas of influence, department of Antioquia.

ARTICLE 36. All the resources of the National Royalty Fund allocated to investment projects expressly provided for in Law 141 of 1994 and other provisions on the subject, which at 30 September each year Tax validity does not have projects submitted to the National Royalties Fund, will be redistributed and will be used in the same way to the financing of projects for drinking water and basic sanitation, road infrastructure, preservation of the environment, mining and energization in accordance with the criteria of equity that the effect of the National Royalty Commission.

In the case of projects submitted and which have not been made available to the last Royalty Commission of the tax term, the resources must be redistributed for the same departments in the sectors mentioned.

PARAGRAFO 1o. In case there are no viable projects in the departments mentioned in 2o. of this Article, the National Royalty Commission may redistribute those resources, for the same sectors in other territorial entities.

PARAGRAFO 2o. For those municipalities located in departments that are interconnected to the national electrical system, but that by their distance from the last connection point makes the necessary works not viable for access to such an interconnected system, access to resources specifically for non-interconnected areas available for this purpose in the National Royalties Fund through energy projects that will have to be processed (viabilization).

ARTICLE 37. Paragraph 1o. of article 1or. Law 141 of 1994 will thus remain:

PARAGRAFO 1o. During the fifteen (15) years following the enactment of this law, the Fund will allocate 15% (15%) of its resources to finance regional energy investment projects, which present the territorial entities and are defined as priorities in the respective development plans.

Of these, 20% (20%) will be allocated to the financing of regional investment projects in distribution infrastructure for the provision of public fuel gas service in strata 1 and 2.

When it comes to electrical projects, resources can be applied to the generation, transport, transformation, expansion and remodeling of networks, maintenance, control and reduction of energy losses, distributed as follows:

1. Forty per cent (40 per cent) for interconnected areas. Eight percent (8%) of these resources to finance the execution of regional hydroelectric projects in the Department of Santander, approved through their electrifying, sisie mpre and when included in the national expansion plan and defined as priorities in the regional development plans. The surplus of these resources will be allocated to rural electrification, with priority for those areas with less coverage in the service, until similar regional coverage is obtained throughout the country, and

2. Forty per cent (40 per cent) for non-interconnected areas.

The regulations will have the criteria for the selection of projects. In any case, the implementation of these projects will require the approval of the Ministry of Mines and Energy, based on the development plans of the companies in the sector.

ARTICLE 38. For the purposes of Article 133 of Law 633 of 2000, as regulated by Decree 1939 of 2001, it is understood by the municipality that produces contributions to the Oil Savings and Stabilization Fund, FAEP.

ARTICLE 39. In the fields of association or concession contracts that end or revert to the Nation, fix a 12% additional royalty on the basic production, which will be divided into thirty percent. 1% (30%) for the producer municipality and 70% (70%) for the producer department. This article shall govern from the sanction of this law, even for fields whose association or concession contracts have reversed the Nation from the 1st. of January 1994.

The royalties set forth in this article shall be used by the producing entities in accordance with the provisions of Articles 14 and 15 of Law 141 of 1994.

ARTICLE 40. Article 54 of Law 141 of 1994 will remain so:

" Article 54. Reallocation of royalties and compensation agreed in favor of the departments. The royalties and compensations agreed in favor of the departments that remain available after applying the limitations provided for in Articles 49 and 51 of this Law, will enter in quality of deposit, to the National Fund of Royalties. It shall allocate them, in an equitable and exclusive manner, to finance eligible projects submitted by the non-producer departments belonging to the same region of economic and social planning as the one whose participation is reduced.

PARAGRAFO 1o. For the purposes of this article it is considered, as a producer department, that more than seventy thousand (70,000) barrels of average monthly daily barrels are exploited.

PARAGRAFO 2o. They will also have the right to stagger, as set out in this article, the municipalities of the old police stations, which are border and in turn limit with the producer department. Their participation in this case will be twenty per cent (20%) of that established.

PARAGRAFO 3o. Of the resources corresponding to the department of Vaupes for this concept, it will also have the capacity to access them in the municipality of Mitu. In the same sense, from the resources corresponding to the department of Vichada, it will access in equal conditions and will have personeria for it the municipality of La Primavera.

ARTICLE 41 TRANSIENT. The royalty and monetary compensation resources determined as participations for the National Royalty Fund, the producer departments and the producing municipalities and Port, which is caused from the loss of validity of Law 619 from 2000 until the enactment of this law, will be distributed in the same terms as laid down by Law 619 of 2000.

ARTICLE 42. This law repeals all provisions that are contrary to and governs from the date of its publication.

The President of the honorable Senate of the Republic,

CARLOS GARCIA ORJUELA.

The Secretary General of the honorable Senate of the Republic (E.),

LUIS FRANCISCO BOADA GOMEZ.

The President of the honorable House of Representatives,

GUILLERMO GAVIRIA ZAPATA.

The Secretary General of the honorable House of Representatives,

ANGELINO LIZANO RIVERA.

COLOMBIA-NATIONAL GOVERNMENT

Publish and comply.

Dada in Bogotá, D. C., on July 23, 2002.

ANDRES PASTRANA ARANGO

The Director of the National Planning Department, in charge of the Office of the Minister of Finance and Public Credit,

JUAN CARLOS ECHEVERRY GARZON.

The Minister of Mines and Energy,

LUISA FERNANDA LAFAURIE RIVERA.

The Director of the National Planning Department,

JUAN CARLOS ECHEVERRY GARZON.