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Whereby The Organization And Operation Of The General System Of Royalties Is Regulated

Original Language Title: Por la cual se regula la organización y el funcionamiento del Sistema General de Regalías

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1530 OF 2012

(May 17)

Official Journal No. 48.433 of 17 May 2012

CONGRESS OF THE REPUBLIC

By which the organization and operation of the General System of Royalties is regulated.

Vigency Notes Summary
Effective Case-law

COLOMBIA CONGRESS

DECRETA:

TITLE I.

OBJECTIVES AND PURPOSES OF THE GENERAL ROYALTY SYSTEM.

ARTICLE 1o. OBJECT. In accordance with the provisions of Article 360 of the Political Constitution, this law is intended to determine the distribution, objectives, purposes, administration, execution, control, efficient use and destination of income from the exploitation of non-renewable natural resources, specifying the conditions for the participation of its beneficiaries. This set of revenue, allocations, organs, procedures and regulations constitutes the General System of Royalties.

2012 MNRELATIONS Resolution 4191

2012 MINRELATIONS Resolution 4190

2012 MINRELATIONS Resolution 3967

2012 MINRELATIONS Resolution 3893

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ARTICLE 2o. OBJECTIVES AND PURPOSES. Pursuant to the provisions of Articles 360 and 361 of the Political Constitution, are objectives and purposes of the System General of Royalties the following:

1. Create conditions of equity in the distribution of income from the exploitation of non-renewable natural resources, in order to generate savings for times of scarcity, to promote the countercyclical character of economic policy and to keep public spending stable over time.

2 To encourage the adoption of investment mechanisms of mineral-energy revenues that will prioritize their distribution to the poorest population and contribute to social equity.

3. Promote the development and regional competitiveness of all departments, districts and municipalities, given the recognition of subsoil resources as a property of the State.

4. To promote the structuring of projects that promote the development of mineral-energy production, in particular small, medium and artisanal mining.

5. Strengthen regional equity in the distribution of mineral-energy revenues, through the integration of territorial entities in common projects; promoting the coordination and planning of investment of resources and prioritization of major development projects.

6. Foster good governance mechanisms and practices.

7. Promote the inclusion, equity, participation and integral development of the black, Afro-Colombian, local and palenqueras communities, the Rom or Gitano people and the indigenous peoples and communities, in accordance with their plans for development and respective life plans.

8. Encourage or encourage investment in the social and economic restoration of the territories where activities of exploration and exploitation of non-renewable natural resources are developed, as well as in environmental protection and recovery, without (a) damage to the environmental liability of the undertakings which advance such activities, by virtue of which they must bring forward conservation and environmental recovery measures in the territories in which such activities are carried out; activities.

TITLE II.

ROYALTY SYSTEM ORGANS.

ARTICLE 3o. ORGANOS. They are organs of the General System of Royalties the Rectoring Commission, the National Department of Planning, the Ministries of Finance and Public Credit, and Mines and Energy, as well as their assigned and linked entities that comply with the functions in the cycle of royalties, the Administrative Department of Science, Technology and Innovation (Colciencias) and the collective organs of administration and decision, all of which will exercise their powers and competences according to the provided by this law.

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ARTICLE 4. COMMISSION RECTORA. The Rector Commission of the General System of Royalties, is the body responsible for defining the general policy of the General System of Royalties, evaluating its general implementation and dictating, through agreements, the regulations of character The system is designed to ensure the proper functioning of the system.

The Rector Commission consists of:

1. The Director of the National Planning Department, or its delegate, who will chair it.

2. The Minister of Mines and Energy, or his delegate.

3. The Minister of Finance and Public Credit, or his delegate.

4. Two (2) Governors, of which one will be responsible for one of the Producers Departments, elected by the same and the other elected by the Assembly of Governors for a period of one (1) year.

5. Two (2) Mayors, of which one will be responsible for one of the producing municipalities, elected by the same and the other elected by the Assembly of Mayors for a period of one (1) year.

6. One (1) Senator and one (1) Representative to the House, who are part of the Permanent Constitutional Committees and are elected by the respective Commissions, for a period of one year, to attend the meetings of the Rector Commission as permanent special guests, with voice but no vote.

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In relation to the ministers and the director of the National Planning Department, the delegation of their participation in the sessions of the Rector Commission can only be held in the deputy ministers and deputy director, respectively.

PARAGRAPH FIRST. For the purposes of determining the participation in the Rector Commission, it is considered as a Producer Department that whose revenue from royalties and compensation is higher than three percent. (3%) of all the royalties and compensation received by the departments of the country, in the title of direct allocations.

It is considered as a Productor Municipality that whose income from royalties and compensation is higher than one percent (1%) of all the royalties and compensation received by the municipalities of the country, direct allocations.

In the regulation, it will be possible to point out the presence of other permanent guests, with a voice but without a vote.

PARAGRAPH SECOND. The decisions taken by the Rector Commission will be made by qualified majority.

THIRD PARAGRAPH. The Rector Commission will have a Technical Secretariat that will be exercised by the National Planning Department under the terms of the regulation.

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ARTICLE 5o. FUNTIONS. The Rector Commission of the General System of Royalties will have the following general functions:

1. Define the general guidelines, processes, guidelines, methodologies and criteria for the operation of the General System of Royalties.

2. Issue non-binding concept on the draft budget of the General System of Royalties prior to its presentation to the Congress of the Republic.

3. To issue a non-binding prior concept to the authorization of the issuance of future vigencies from the resources of the General System of Royalties, as established in this law.

4. To study the general evaluation reports of the General System of Royalties.

5. Propose policy changes in relation to the objectives and operation of the General System of Royalties based on the general evaluation reports of this System.

6. Submit to Congress the financial statements and results of the General System of Royalties and other reports that are required.

7. Organize and administer the information system that allows us to provide and release data on the operation, operation and financial status of the General System of Royalties.

8. Dictate your own regulation.

9. The others I pointed to the law.

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ARTICLE 6o. COLLECTIVE ORGANS OF ADMINISTRATION AND DECISION. The collective organs of administration and decision are responsible for defining the investment projects submitted to their consideration that will be financed with resources of the General System of Royalties, as well as evaluate, viabilize, approve and prioritize the convenience and opportunity to fund them. They shall also designate their executor which shall be of a public nature; all in accordance with the provisions of this Law.

The functioning of the collective organs of administration and decision, as well as the way to select its members will be defined by the regulation. In any case, the participation in these collegiate bodies will be ad honorem. Attend the Regional Administration and Decision Bodies as permanent guests two Senators who have obtained more than 40% of their vote in the respective department and two representatives to the House. This representation will be rotated every year. There will be a representative of the High Level Consultative Commission for Black Communities, Afro-Colombian, Raizales and Palenqueras, as well as a representative of the indigenous communities, with voice and no vote, in each administrative and decision-making body in those departments in which they are represented.

Effective Case-law

PARAGRAFO. For the designation of the executor, the Collegiate Authority of Administration and Decision, will take into account, among others, the alerts generated by the System of Monitoring, Monitoring, Control and Evaluation of the resources of the General System of Royalties.

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ARTICLE 7o. FUNCTIONS OF THE MINISTRY OF MINES AND ENERGY.

1. To provide timely, through the National Hydrocarbons Agency and the National Mining Agency, the revenue projections of the General System of Royalties necessary for the elaboration of the resource plan.

2. Determine the direct allocations between the beneficiaries referred to in the second indent of Article 361 of the Political Constitution, in accordance with the criteria laid down by the law.

3. Audit the exploration and exploitation of non-renewable natural resources.

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4. Advance the activities of knowledge and geological mapping of the Colombian subsoil.

5. Accompany the Ministry of Finance and Public Credit in the presentation of the draft budget law of the General System of Royalties.

6. The others I pointed to the law.

PARAGRAFO. The above functions will be fulfilled in accordance with the legal mandates on competencies contained in the current regulations.

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ARTICLE 8o. FUNCTIONS OF THE MINISTRY OF FINANCE AND PUBLIC CREDIT.

1. Consolidate, assign, manage, and rotate resources among beneficiaries, recipients, and administrators of the General System of Royalties, as referred to in article 361 the Political Constitution and the present law.

2. Formulate the draft budget of the General System of Royalties for the concept of the Rector Commission and present it in conjunction with the Ministry of Mines and Energy before the Congress of the Republic for approval.

3. Develop the financial statements of the General System of Royalties.

4. The others I pointed to the law.

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ARTICLE 9o. FUNCTIONS OF THE NATIONAL PLANNING DEPARTMENT.

1. To exercise the Technical Secretariat of the Rector Commission referred to in this Law.

2. 267 of Law 1753 of 2015 >

Editor Notes
Vigency Notes
Previous Legislation

3. To verify directly or through third parties, that projects eligible to be financed with resources from the Regional Compensation and Regional Development Funds, defined by the collegiate bodies of administration and decision of the They comply with the requirements laid down by the Rectoring Commission for the approval of the projects by the Board of Directors and Decision.

4. Administer the System of Monitoring, Monitoring, Control and Evaluation of the General System of Royalties.

5. Calculate and report to the Ministry of Finance and Public Credit the Distribution of the resources of the General System of Royalties between the funds and the different beneficiaries.

6. Administer the project bank of the General System of Royalties.

7. the others I pointed to the law.

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ARTICLE 10. FUNCTIONS OF THE ADMINISTRATIVE DEPARTMENT OF SCIENCE TECHNOLOGY AND INNOVATION, COLCIENCIAS.

1. 267 of Law 1753 of 2015 >

Editor Notes
Vigency Notes
Previous Legislation

2. To verify directly or through third parties that the investment projects to be financed with resources of the Fund of Science, Technology and Innovation, comply with the requirements established by the Rector Commission for the approval of the projects the Collegiate Authority of Administration and Decision.

3. Exercise the Technical Secretariat of the Collegiate Authority of Administration and Decision in the terms of Article 32.

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ARTICLE 11. OPERATION OF THE GENERAL ROYALTY SYSTEM. In compliance with the provisions of the third paragraph of the third paragraph of Article 361 of the Political Constitution, assign up to 2% the resources of the General System of Royalties for its operation. The Technical Secretariats of the Board of Directors of Management and Decision may be strengthened by these resources. The administration of this percentage will be in charge of the Rectoring Commission.

PARAGRAFO. Under these resources, the National Planning Department will strengthen the Planning Secretariats of the poorest municipalities in the country, in order to improve their performance and response to the needs of the of the same.

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TITLE III.

ROYALTY CYCLE.

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ARTICLE 12. ROYALTY AND COMPENSATION CYCLE. For the purposes set out in the second paragraph of Article 360 of the Political Constitution, the cycle of royalty and compensation generation comprises the activities of audit, settlement, collection, transfer, distribution and transfers to beneficiaries of direct payments and compensation.

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ARTICLE 13. FISCalización. It is understood by audit the set of activities and procedures that are carried out to ensure compliance with the rules and contracts for the exploration and exploitation of non-renewable natural resources, the effective determination of production volumes and the application of best exploration and production practices, taking into account technical, operational and environmental aspects, as a determining basis for appropriate determination and collection of royalties and compensation and the operation of the General System of Royalties.

The National Government will define the criteria and procedures for the development of the exploration and exploitation of natural resources that are not renewable technically, economically and environmentally efficient, as well as technical, technological, operational and administrative to exercise oversight work. For the outsourcing of the audit, as determined by the regulation, the experience in metrology in the mineral and hydrocarbon sector, suitability for audit, technical intervention, etc. administrative and financial or financial review and economic solvency.

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The percentage allocated to the monitoring of exploration and exploitation of the fields, and to the knowledge and geological mapping of the subsoil, will be administered in the form indicated by the Ministry of Mines and Energy, directly, or through the entities designated by it.

PARAGRAPH FIRST. The objective selection of individuals to carry out the audit, must observe the rules of public procurement, on conflicts of interest, inabilities and incompatibilities in force, not only vis-à-vis the contracting entities but also the undertakings on which the audit is to be carried out.

PARAGRAPH SECOND. The DIAN may conclude inter-administrative cooperation and technical assistance agreements with entities of the national order that exercise the oversight of the exploration and exploitation of non-renewable natural resources.

THIRD PARAGRAPH THIRD. The above, without prejudice to the powers and oversight exercised by the competent environmental authorities in accordance with current regulations.

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ARTICLE 14. LIQUIDATION. The result of the application of the technical variables associated with the production and marketing of hydrocarbons and minerals in a given period, such as production volumes, base prices, is understood as a liquidation. the market representative rate and percentages for the participation of regalia for non-renewable natural resources, under the conditions laid down in the law and in the contracts. The Ministry of Mines and Energy, the National Hydrocarbons Agency and the National Mining Agency, will be the highest authorities to determine and execute the procedures and deadlines for settlement according to the non-renewable natural resource treat. The royalties are caused at the time when the non-renewable natural resource is extracted, i.e., in the mouth of the pit, in the mouth of the mine and on the edge of the mine.

PARAGRAPH 1 FIRST. In order to encourage the exploration and exploitation of hydrocarbons from non-conventional fields (methane gas associated with coal; shale gas or shale gas; oil or oil (a) a quota of 60% (60%) of the percentage of the share of royalties equivalent to that of the quota for the production of oil and gas; holding of conventional crude.

PARAGRAPH SECOND. The Ministry of Mines and Energy shall deliver to the producing territorial entities, with the settlement frequency indicated for each of the non-renewable natural resources, without exceeding the trimester, the detailed settlement of their assignment in compliance with the second paragraph of article 361 of the Political Constitution, discriminating against the values corresponding to the variables referred to in the first subparagraph of this Article, in accordance with the established in the contracts and in the regulations in force.

THIRD PARAGRAPH. For the purposes of verifying the veracity of information provided by companies holding licenses for the exploitation of non-renewable natural resources or where there are serious indications of The Office of the Comptroller General of the Republic may access the financial, tax, customs and accounting authorities through the competent public entities to the State by the same or the business group to which they belong. concerning the licensor and third party contractors of the same, as well as that relating to the entities and public officials responsible for the matters under investigation.

With regard to the information obtained in the framework of the exercise of this function, the reserve duty provided for in Article 15 of the Political Constitution must be maintained and guaranteed.

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ARTICLE 15. BASIC PRICES FOR THE SETTLEMENT OF ROYALTIES AND COMPENSATION. The National Hydrocarbons Agency and the National Mining Agency shall, by means of administrative acts of a general nature, indicate the terms and conditions for the determination of the the base prices for the settlement of royalties and compensation proceeds from the exploitation of non-renewable natural resources, without prejudice to the agreements in force on the date of enactment of this law.

For this purpose, they will take into account the relationship between exported and domestic products, deducting transportation, handling, handling, refining, and marketing costs, as appropriate for the purpose of establishing the definition technically appropriate to reach prices on edge or well mouth or mine. In the case of gas, the base price shall be associated with the marketing price of that product in the mouth of the well, taking into account the general conditions set out above in the rules and regulations in force.

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ARTICLE 16. RAISED. It is understood by collecting the receipt of the royalties and compensations liquidated and paid in money or in kind for who exploit the non-renewable natural resources, by the National Agency of Hydrocarbons and the National Agency of Mining.

The National Hydrocarbons Agency and the National Mining Agency shall establish by means of a reasoned act of a general nature, the payment in money or in kind of royalties.

When the royalties are paid in kind, the National Government will regulate the methodology, conditions and terms that guarantee the adequate flow of resources to the General System of Royalties, so that the resources that are generated between the the determination of the base settlement prices and the marketing of the royalties will be distributed by 50% for the single market of the General System of Royalties and the remaining 50% in favour of the National Government.

The National Hydrocarbons Agency and the National Mining Agency shall establish by means of a reasoned act of a general nature, the payment in money or in kind of royalties.

When the royalties are paid in kind, the National Government will regulate the methodology, conditions and terms that guarantee the adequate flow of resources to the General System of Royalties, so that the resources that are generated between the determination of the base settlement prices and the marketing of the royalties will be distributed by 50% for the single market of the General System of Royalties and the remaining 50% in favour of the National Government.

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PARAGRAFO. It is understood as payment of royalties in kind, the material delivery of an amount of gross product exploited.

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ARTICLE 17. TRANSFER. It is understood by transfer the total turn of the resources collected by concept of royalties and compensation in a given period, that they carry out without budget operation, the National Agency of Hydrocarbons and the Agency National of Mining, to the Single Account of the General System of Royalties established by the Directorate General of Public Credit and National Treasury of the Ministry of Finance and Public Credit. The National Government will determine the deadlines and conditions for the transfer of the indicated resources.

The Directorate General of Public Credit and National Treasury of the Ministry of Finance and Public Credit will manage the resources transferred to the Single Account of the General System of Royalties until the periodic turns are carried out one of the beneficiaries and administrators of the resources of the General System of Royalties. The exercise of the previous administration function, will be carried out taking into account that the obligations of the General Directorate of Public Credit and National Treasury of the Ministry of Finance and Public Credit are of medium and not of result, reason by which it does not involve the granting of guarantees of minimum return on managed resources.

PARAGRAFO. The Rector Commission of the General System of Royalties will point out in coordination with the General Directorate of Public Credit and National Treasury of the Ministry of Finance and Public Credit the guidelines and policies administration general to be taken into account for the administration of the resources of the single account of the General System of Royalties.

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ARTICLE 18. DISTRIBUTION. It is understood by distribution the application of the percentages indicated in the Political Constitution and in this law for each of the destinations of the General System of Royalties. The National Government shall establish procedures to ensure distribution in accordance with applicable regulations.

PARAGRAPH 1. In accordance with the provisions of Article 361 2) of the Political Constitution, the allocations of royalties distributed to the Fund National of Royalties, derived from the exploitation of each of the non-renewable natural resources referred to in Articles 31 to 37 and the 39 of Act 141 of 1994, will be added in proportion to the distributed to the respective departments and municipal producers listed in each of the articles concerned.

In the case of distributions that are dealt with in Article 35 of Act 141 of 1994, the allocations of royalties distributed to the National Royalty Fund will be evenly distributed among the Beneficiary producer departments.

PARAGRAPH SECOND. In accordance with the second paragraph of article 361 of the Political Constitution, the allocations of royalties and compensation to According to Articles 38 and 46 of Law 141 of 1994, they will be distributed 100% to the municipalities or districts producing.

THIRD PARAGRAPH. In accordance with the provisions of the second paragraph of article 361 of the Political Constitution, the allocations of compensation distributed to institutions that have been liquidated or in the process of liquidation, the industrial or commercial enterprises of the State or those who do their business, the Fund for the Promotion of Coal and the Regional Investment Fund (FIR), which are derived from the exploitation of each of the non-renewable natural resources referred to in Articles 16 paragraph 5; 40 to 45 and 47 to 48 of Act 141, 1994, They shall be added in proportion to those distributed to the respective producers ' departments and municipalities in each of the articles referred to above.

In the case of distributions that are dealt with in Article 43 of Law 141 of 1994, the allocations of compensation distributed to the National Royalty Fund will be distributed equally among the Beneficiary producer departments.

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ARTICLE 19. " [passage of the royalties]. For the purposes of this law, the disbursement of resources made by the Ministry of Finance and Public Credit to each of the beneficiaries of the General System of Royalties, according to the distribution to the accounts authorized and registered by each of the beneficiaries for this purpose.

The resources referred to in Chapter IV of Title IV of this Law shall be located in each of the departments, municipalities and districts in the territory of which non-renewable natural resource holdings are brought forward, as well as municipalities and districts with sea and river ports where such resources or products derived therefrom are transported.

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ARTICLE 20. DISTRIBUTION CONCEPTS. The resources of the General System of Royalties will be administered through a system of account management, which will be made up of the following funds, beneficiaries and concepts of spending according to the percentages defined by article 361 of the Political Constitution and this law:

1. Savings and Stabilization Fund.

2. Departments, municipalities and districts in whose territory holdings of non-renewable natural resources are brought forward, as well as municipalities and districts with sea and river ports where such resources or derived products are transported of the same.

3. Pensional savings of the Territorial Entities.

4. Science, Technology and Innovation Fund.

5. Regional Development Fund.

6. Regional Compensation Fund.

7. Audit of the exploration and exploitation of the fields, and the geological knowledge and mapping of the subsoil.

8. Operation of the System of Monitoring, Monitoring, Control and Evaluation of the General System of Royalties.

9. Operation of the General System of Royalties.

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ARTICLE 21. PORT DISTRICTS AND MUNICIPALITIES. Paragraph 2o of Article 29 of Law 141 of 1994, shall remain as follows:

SECOND PARAGRAPH. If non-renewable natural resources are not transported through seaborne and river ports, the percentage of royalty distribution and compensation allocated to them will pass to the department at whose jurisdiction was conducted on the holding of the respective appeal.

The rest of the article will remain in effect.

TITLE IV.

INVESTMENT OF GENERAL ROYALTY SYSTEM RESOURCES.

CHAPTER I.

GENERAL RULES FOR INVESTMENT PROJECTS.

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ARTICLE 22. DESTINACIÓN. With the resources of the General System of Royalties, investment projects and the structuring of projects, as components of an investment project or presented in an individual form, may be financed. Investment projects may include the operation and maintenance phases, provided that the implementation horizon is defined on the same basis. In any case, no permanent expenditure may be financed.

When applying for funding for project structuring, the initiative must be accompanied by its respective profile.

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ARTICLE 23. CHARACTERISTICS OF THE INVESTMENT PROJECTS. The projects that may be financed with the resources of the General System of Royalties must be in accordance with the National Development Plan and the development plans of the entities. territorial, as well as complying with the principle of Good Government and with the following characteristics:

1. Relevance, understood as the opportunity and convenience of formulating projects in accordance with particular conditions and socio-cultural, economic and environmental needs.

2. Feasibility, understood as the fulfilment of the required legal, technical, financial, environmental and social conditions and criteria.

3. Sustainability, understood as the possibility of financing the operation and operation of the project with permanent income.

4. Impact, understood as the effective contribution made by the project to the fulfilment of local, sectoral, regional and objective goals and purposes of the General System of Royalties.

5. Articulation with national plans and policies of the territorial entities, the black communities, Afro-Colombians, the indigenous communities and the communities of the Rom or Gitano people of Colombia.

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ARTICLE 24. REGIONAL PLANNING EXERCISES. For the preparation of the indicative annex to the biannual budget of the General System of Royalties, each Collegiate Authority of Administration and Decision via its technical secretariat shall convene, with due in advance, to the advisory technical committees referred to in Article 57 and other relevant actors to carry out identification and prioritization exercises for initiatives and/or projects likely to be funded by royalty resources. These regional planning exercises should be carried out with a participatory approach to ensure the interaction of different local and regional actors for the presentation and generation of consensus around initiatives and/or projects.

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ARTICLE 25. FORMULATION AND PRESENTATION OF INVESTMENT PROJECTS. With the particularities provided for in Chapter IV of this Title, any investment project must be formulated in accordance with the methodologies and guidelines defined by the Department. National of Planning, as a national planning entity and in the development of the provisions of article 49 of Law 152 of 1994 and based on the guidelines defining the Rectoring Commission.

For such purposes, all natural or legal persons, public or private, and minority ethnic communities may formulate investment projects, in the terms of the foregoing paragraph.

The investment projects will be presented by the territorial entities to the respective Collegiate Authority of Administration and Decision, accompanied by the respective studies and supports prior review of the performance of the characteristics to which refers to article 23 and harmonization with territorial development plans.

Dealing with projects that have a differential focus on indigenous communities, the presentation of these projects will be carried out by the representatives of these communities.

Dealing with projects that have a differential approach in the Black, Afro-Colombian, Raizal and Palenqueras communities, the presentation of these projects will be carried out by the representatives of those communities chosen only and autonomously. by the Organizations of the Base of Black Communities or Community Councils of Black Communities, Afro-Colombian, Raizales and Palenqueras, duly registered in the single register of the Ministry of the Interior. For the purposes set out in this paragraph, associations that are made up of state entities may not participate.

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ARTICLE 26. FEASIBILITY OF THE INVESTMENT PROJECTS. The Board of Directors and Decision will make the investment projects that will be financed from the resources of the Regional Compensation Funds, Regional Development, Science Technology and Innovation and direct allocations, subject to the rules, requirements and procedures to be defined for these purposes.

The National Planning Department will make investment projects that have co-financing the resources of the General Budget of the Nation.

Viabilizing bodies may rely on the opinion of public and private legal persons, or natural persons with experience and recognized trajectory and suitability, in respect of the relevant issues with the respective projects. The National Government will regulate this operation.

The verification of compliance with the requirements for the approval of investment projects by the College of Administration and Decision-funded Decision-funded Regional Development Funds will be in charge of the National Department of Planning; those financed with resources from the Science and Technology Fund will be in charge of the Administrative Department of Science and Technology and Innovation, and those financed with the allocations They will be in charge of the respective territorial entities.

TRANSIENT PARAGRAPH. Investment projects made available by the Ministries prior to the current law may be submitted directly to the Collegiate Authority of Administration and Decision assessment, monitoring, prioritisation and eventual approval.

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ARTICLE 27. APPROVAL AND PRIORITIZATION OF INVESTMENT PROJECTS. The Board of Directors and Decision will be responsible for the viability and approval of investment projects to be financed from the resources of the General System of Royalties, subject to verification of the availability of resources certified by the Ministry of Finance and Public Credit. In their decisions, they will prioritize projects, taking into account, among others, the following criteria:

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1. Territorial, economic, social, cultural and environmental impact.

2. Compliance with the sectoral or territorial goals in accordance with the National Development Plan and the territorial development plans.

3. Improvement of the living conditions of the black, Afro-Colombian, local and palenqueras communities, indigenous communities, and the Rom or Gitano people of Colombia.

4. Contribution to municipal, regional, national and border integration.

5. Conformation of associative schemes established through the mechanism of contracts Plan.

6. Projects aimed at improving the infrastructure in the border areas.

7. Improvement of infrastructure in the areas of exploration and exploitation of non-renewable resources.

8. For the completion of projects already initiated and which are priorities for regional development.

9. Allocation of resources for physical investments in education.

10. Projects for recovery and environmental stabilization, reforestation and ecosystem recovery.

11. For the extension, expansion and use of non-conventional energy, such as wind, solar, geothermal or equal characteristics, which are renewable and environmentally sustainable.

12. Resource allocation for the development of physical infrastructure to improve the quality of education.

PARAGRAFO. In the non-interconnected zones of the country, you will have special consideration of the energy projects.

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ARTICLE 28. EXECUTION OF INVESTMENT PROJECTS. The investment projects to be financed from the General System of Royalties will be executed by the one who designates the respective Collegiate Authority of Administration and Decision, with strict subjection to the regime the budget defined in this law and the applicable and applicable public procurement law and the executor shall ensure the correct execution of the resources allocated to the investment project, as well as the provision and recording of the information required by the Monitoring, Monitoring and Evaluation System.

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Investment projects to be financed from the resources of the Science and Technology Fund will be subject to the contractual rules laid down in Law 1286 of 2009.

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In order for minority ethnic communities to be implementing investment projects, they must accredit the administrative act of recognition issued by the competent authority, in accordance with Article 6or this law.

PARAGRAPH 1. The Board of Directors and Decision will decide the instance that will be used in the terms of the article 83 of the Law 1474 of 2011, taking into account the importance, nature or amount of the investment project.

PARAGRAPH SECOND. The departments, municipalities and districts in whose territory holdings of non-renewable natural resources are advanced, as well as municipalities and districts with sea and river ports where the resources or products derived therefrom shall be transported directly to those resources.

CHAPTER II.

RESOURCES FROM THE SCIENCE AND TECHNOLOGY FUND.

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ARTICLE 29. SCIENCE, TECHNOLOGY AND INNOVATION FUND. The Science, Technology and Innovation Fund will aim to increase the scientific, technological, innovation and competitiveness capacity of the regions through projects contributing to the production, use, integration and appropriation of knowledge in the productive apparatus and in society in general, including projects related to biotechnology and information and communications technologies, contributing to social progress, economic dynamism, sustainable growth and greater prosperity for the whole population.

The departments will participate in the distribution of the resources of the Science and Technology Fund in the same proportion as the sum of the resources of the Regional Compensation Fund and the Regional Development Fund.

PARAGRAFO. For the purposes of the distribution of the above paragraph, the Capital District of Bogota will have department treatment, given its constitutional status as District Capital and its special regime.

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ARTICLE 30. PROGRAMS AND PROJECTS. The programs and projects in science, technology and innovation of the departments, municipalities and districts that are financed with the resources of the Fund of Science, Technology and Innovation, are defined, viable and approved by the Collegiate Authority of Administration and Decision referred to in the third paragraph of the second paragraph of Article 361 of the Political Constitution.

PARAGRAPH 1 FIRST. The High Level Advisory Commission for Black, Afro-Colombian, Raizal and Palenqueras communities will designate one of the public universities, which will be part of the Collegiate Authority of Administration and Decision in the Science, Technology and Innovation Fund.

PARAGRAPH SECOND. For the purposes of this law when the appointee is a university, the latter must have at least four accredited programs and shall have a five-year term to be institutionally accredited. if at the time of designation it is not.

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ARTICLE 31. DECISIONS OF THE COLLEGIATE BODY. The decisions of the Collegiate Authority of Administration and Decision shall be adopted with a minimum of two favourable votes. The number of votes shall be three (3). One of the National Government, one of the departmental government and one of the universities. The presence of at least one of the members of each level of government and of the universities is necessary for the decision-making.

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ARTICLE 32. TECHNICAL SECRETARIAT. The Technical Secretariat of the Collegiate Authority of Administration and Decision will be in charge of the Administrative Department of Science, Technology and Innovation (Colciencias), which will be responsible for providing the infrastructure Logistical, technical and human required for the functioning of the collegiate body, as well as convoking its members. The Technical Secretariat shall be responsible for the report and the preparation of minutes of the sessions of the collegiate body.

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CHAPTER III.

RESOURCES FROM REGIONAL DEVELOPMENT AND REGIONAL COMPENSATION FUNDS.

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ARTICLE 33. REGIONAL DEVELOPMENT FUND. The Regional Development Fund (FDR) will aim to improve the competitiveness of the economy, as well as to promote the social, economic, institutional and environmental development of territorial entities through the financing of regional impact investment projects, agreed between the national government and the territorial authorities in the framework of the partnership schemes to be established.

The resources of the Regional Development Fund will be distributed among the departments, for each year, taking into account the following criteria:

1.1 The 60% according to the participation of the department in the total population of the country, for which the DANE certified departmental population projections will be taken for each term in which the distribution is carried out.

1.2 40% according to relative poverty, for which the degree of poverty of each department will be taken, measured with the Index of Unmet Basic Needs (NBI), divided by the national NBI. The DANE shall certify the NBI values referred to in this numeral for each currency in which the distribution is carried out.

The criteria outlined in numerals 1.1 and 1.2 of this article will be applied as follows:

a) The participation of each department in the total population of the country will be raised to the exponent 60%, obtaining the population factor.

b) The NBI of each department divided by the national NBI will be raised to the exponent 40% to have a measure of the poverty factor.

c) The population factor and the poverty factor will be multiplied for each department. The percentage of the FDR that will correspond to each department will be equal to the product of its population factor and its poverty factor, divided by the sum of these products for all departments.

PARAGRAFO. For the purposes of the distribution of the above paragraph, the Capital District of Bogota will have department treatment, given its constitutional status as District Capital and its special regime.

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ARTICLE 34. REGIONAL COMPENSATION FUND. The Regional Compensation Fund (RCF) will be used to finance regional or local development impact projects in the country's poorest territorial entities, agreed between the National Government and territorial entities, in accordance with the criteria set out in the ninth indent of Article 361 of the Constitution.

The resources of the Regional Compensation Fund will be distributed among the departments, for each year, taking into account the following criteria:

1. 60% of the RCF's resources will be distributed as follows:

1.1 It will be determined which departments of the country have a percentage of population in poverty-according to the criterion of basic unmet needs-more than 30%. These departments shall be designated as receiving departments on the basis of departmental poverty.

1.2 It will be determined which departments of the country have municipalities with a percentage of population in poverty-according to the criterion of basic unmet needs-more than 35%. These departments will be called the recipient departments on the basis of municipal poverty.

1.3 The 50% of the resources defined in the numeral 1 of this article will be divided between the departments receiving the departmental poverty criterion according to the criteria mentioned below:

(a) 40% according to the participation of each department in the total population of the country, for which the DANE certified departmental population projections will be taken for each term in which the distribution is carried out.

b) 50% according to relative poverty, for which the degree of poverty of each department, measured with the Index of Unmet Basic Needs (NBI), divided by the national NBI, will be taken. The DANE shall certify the NBI values referred to in this numeral for each currency in which the distribution is carried out.

c) 10% according to the relative unemployment rate, for which the unemployment rate of each department divided by the national unemployment rate will be taken. The DANE shall certify the values corresponding to the unemployment rates referred to in this numeral for each currency in which the distribution is carried out.

The criteria outlined in the numeral 1.3 of this article will be applied as follows:

i. The participation of each department in the total population of the country will be raised to the exponent 40%, obtaining the population factor.

ii. The NBI of each department divided by the national NBI will be raised to the exponent 50% to have a measure of the poverty factor.

iii. The unemployment rate of each department divided by the national unemployment rate will be raised to the exponent 10%, to have a measure of the unemployment factor.

iv. Population factor, poverty factor and unemployment factor will be multiplied for each department.

v. The percentage of resources allocated to each department will be equal to the product of its population factor, its poverty factor and its unemployment factor, divided by the sum of these products for all departments.

1.4 The remaining 50% of the resources defined in the numeral 1 of this article will be divided among the receiving departments by municipal poverty criterion, according to the criteria mentioned below:

a. 40% according to the participation of each department in the total population of the country, for which the DANE-certified departmental population projections will be taken for each term in which the distribution is carried out.

b. 50% according to relative poverty, for which the degree of poverty of each department will be taken, measured with the Index of Unmet Basic Necessities (NBI), divided by the national NBI. The DANE shall certify the NBI values referred to in this numeral for each currency in which the distribution is carried out.

c. 10% according to the relative unemployment rate, for which the unemployment rate of each department divided by the national unemployment rate will be taken. The DANE shall certify the values corresponding to the unemployment rates referred to in this numeral for each currency in which the distribution is carried out.

The criteria outlined in the number 1.4 of this article will be applied as follows:

i. The participation of each department in the total population of the country will be raised to the exponent 40%, obtaining the population factor.

ii. The NBI of each department divided by the national NBI will be raised to the exponent 50% to have a measure of the poverty factor.

iii. The unemployment rate of each department divided by the national unemployment rate will be raised to the exponent 10%, to have a measure of the unemployment factor.

iv. The population factor, the poverty factor and the unemployment factor will be multiplied for each department.

v. The percentage of resources allocated to each department will be equal to the product of its population factor, its poverty factor and its unemployment factor, divided by the sum of these products for all departments.

In the event that by virtue of the application of the above literals, some department is not involved in the resources corresponding to the Regional Compensation Fund (FCR), it will be guaranteed of this fund at least, the percentage equivalent to the participation of the department which resulted in less allocation in that fund. These resources will be deducted proportionally from the quota of each of the other departments benefiting from this fund. This participation will not be taken into account for the rest of the RMS distributions.

2. Of the total resources from the Regional Compensation Fund of the General System of Royalties, 40% will be allocated for the financing of local impact projects. Of which 30% will be for projects of local impact in the poorest municipalities of the country and with the remaining 10% will only be able to finance projects submitted by municipalities of the fourth, fifth and sixth category that do not receive resources of 30% of which deals with this number and which has an NBI of less than or equal to 35%, according to population and poverty criteria defined by the regulation.

30% of the above mentioned sub-section will be allocated by municipal quotas that will be defined in proportion to the population of each of the beneficiary municipalities.

For the definition and approval of these projects, the Collegiate Authority of Administration and Decision that was established by the Constitution for the direct allocations of the producer departments will be held. For this purpose only, this body shall be made up of the delegate of the National Government, the Governor or his delegate and the Mayor.

To access these resources, the projects must be properly structured and viable. Likewise, they must be presented to the Collegiate Authority mentioned in the previous paragraph, which will be approved with the sole verification of their inclusion in the respective municipal development plan.

These projects will be implemented directly by the municipalities benefited, without prejudice to the fact that the Mayor, before the respective Collegiate Authority, proposes another executor. In order to implement the projects, the existing contractual rules and the other rules laid down in this decree must be complied with.

The structuring of these projects can be co-financed by the General System of Royalties. In any event, this structure shall not affect the municipal quota referred to in this Article.

PARAGRAPH FIRST. Of the total resources from the Regional Compensation Fund of the General System of Royalties will be allocated 30% for local impact projects in the poorest municipalities of the country, (a) to finance projects submitted by municipalities of the fourth, fifth and sixth categories which do not receive resources of 30% of the total number 2 of this Article and which have a total of 10%, a NBI indicator of less than or equal to 35%, according to population and poverty criteria defining the regulation. Of the total resources to finance local impact projects, it will be allocated up to 8% for initiatives with a differential approach for the Black, Afro-Colombian, Raizal and Palenqueras communities, and up to another 8% for initiatives with a focus differential for indigenous communities. All in accordance with the provisions of this decree.

PARAGRAPH SECOND. Under the operating resources of the General System of Royalties, the National Planning Department will support the strengthening of the municipal planning secretariats, with the aim of increase its institutional capacity for the formulation of projects to the General System of Royalties, among others.

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ARTICLE 35. DECISIONS OF THE COLLEGIATE BODIES. The decisions of these Collegiate Bodies of Administration and Decision shall be adopted with a minimum of two favourable votes.

The number of votes will be three (3), one for each level of government, as well: National Government one vote; departmental one vote; and municipal and district one vote. The presence of at least one of the members of each level of government is required for decision-making.

TRANSIENT PARAGRAPH. While the Collegiate Bodies of Management and Decision are elected and made up, the Rectoring Commission may approve the investment projects to be financed from the funds of the General System of Royalties.

The feasibility of the projects will be carried out by the competent ministries.

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ARTICLE 36. TECHNICAL SECRETARIAT. The technical secretariat of these administrative and decision-making bodies shall be exercised directly by the departments of the departments which are part of that organ or by whom they are jointly responsible. design. It will be in charge of providing the logistical, technical and human infrastructure required for the functioning of the collegiate body, as well as convening its members. He will also be responsible for the report and the drafting of minutes of the sessions of the collegiate body.

CHAPTER IV.

OF DIRECT ASSIGNMENTS.

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ARTICLE 37. DEPOSITS IN TWO OR MORE TERRITORIAL ENTITIES. For the purposes of the settlement of royalties and compensation in respect of the second paragraph of Article 361 of the Political Constitution, when a field is located in two or more territorial entities, it shall be carried out in proportion to the participation of each entity in that field, regardless of the area of the municipalities in which it is being exploited in the the cut-off date of the settlement. The Ministry of Mines and Energy, or to whom the audit is delegated, taking into account the field of the field and the production volumes, shall define for each case, by resolution, the participation that corresponds to each beneficiary.

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ARTICLE 38. DEPOSITS IN JURISDICTIONAL MARITIME SPACES. For the non-renewable natural resource holdings located in jurisdictional maritime spaces, the royalties and compensations referred to in the second paragraph of the article 361 of the Political Constitution, shall be settled in favour of territorial entities with sea coasts that are located up to forty (40) nautical miles of the operating area, in the words stipulated in the law, after delimitation of the Maritime Directorate General (Dimar).

In the events in which the field located in the jurisdictional maritime spaces benefits two or more territorial entities, the Ministry of Mines and Energy or who is delegating the audit, after delimitation of the Directorate General Maritime (Dimar) will define for each case, by resolution, the participation that corresponds to each beneficiary taking into account the area of the field and the volumes of production.

For distances greater than forty (40) nautical miles of the operating area, the corresponding royalty and compensation resources shall be rotated in proportion to the Funds of Science, Technology and Innovation, of Compensation Regional, Regional Development, Savings and Stabilization and for territorial pension savings.

PARAGRAFO. For the purposes of the Regalias and Compensations that treats the second paragraph of article 361 of the Political Constitution, the area of the Department of San Andrés, Providencia and Santa Catalina is the one between the parallels 12 to 16 and meridians, 78 to 82 (12o and 16o of north latitude and 78o and 82o of west longitude) so that the provisions in this article will not be applied.

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ARTICLE 39. RECIPIENTS OF DIRECT ASSIGNMENTS. The territorial entities that address the second paragraph of Article 361 of the Political Constitution will receive direct allocations under the the right to participate in the royalties and compensation provided for in that rule, without prejudice to their right to participate in the resources of the system's funds. Regional Autonomous Corporations will receive compensation in the terms set out in Articles 40, 41, 46, 47 and 48 of Law 141 of 1994.

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ARTICLE 40. DESTINATION OF THE RESOURCES OF THE DIRECT ALLOCATIONS. The resources of the direct allocations that address the second indent of article 361 of the Political Constitution and the article 21 of this law shall be used for the financing or co-financing of investment projects for the social, economic and environmental development of territorial entities.

For the allocation of these resources, the beneficiary entities will be subject to their existing powers, and will apply the principles of coordination, competition and subsidiarity in order to avoid duplicity of investments between the beneficiaries. levels of government.

With the resources of royalties and compensation will not be financed operating expenses, nor programs for restructuring liabilities or fiscal and financial consolidation.

The resources referred to in this Article may only be the subject of a pledge or a source of payment for public credit operations acquired by the territorial entities, in the case of investment projects. approved by the Board of Directors and Decision, in accordance with the rules and conditions laid down in the rules in force.

In any case, the municipalities with income from direct allocations above 2,000 smlmv received the year immediately before, where indigenous communities and Black, Afro-Colombian, Raizales and Palanqueras communities are located. duly accredited by the competent authority, shall allocate at least 3% of these resources for investment projects with a differential approach in that population. In addition, the departments with revenues from direct allocations of more than 2,000 smlmv received the year immediately above, will allocate at least 1% of these resources for investment projects with a differential approach in the communities. Indigenous and Black, Afro-Colombian, Raizales and Palanqueras communities, duly accredited by the competent authority, which are located in those municipalities that are not beneficiaries of direct or minor income allocations to those who refers to this paragraph.

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ARTICLE 41. INVESTMENT PROJECTS. The entities benefiting from the investment projects referred to in this Chapter shall carry out the prior assessment and registration thereof, in accordance with the provisions of this Law, in particular Chapter I of Title IV.

For the purpose of executing the projects that are intended to be financed with resources from the direct allocations, they must be consistent with the territorial development plan, and be formulated according to the methodologies and guidelines that define the National Planning Department, as a national planning agency and in the development of the provisions of article 49 of Law 152 of 1994.

The departments, municipalities or districts will advance the functions of the technical secretariat of the Collegiate Organs of Administration and Decision. to convene its members.

When the population benefiting from a project is from indigenous communities, Negras, Afro-Colombian, Raizales and Palenqueras, the territorial entity will convene the legally elected representative or its delegate in accordance with the regulations. to support the project.

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ARTICLE 42. ADMINISTRATIVE AND DECISION-MAKING BODIES.

166 of Law 1753 of 2015. The new text is as follows: > The Board of Directors and Decision of the departments will be composed of two (2) Ministers or their delegates, the respective governor or his delegate and a number equivalent to ten percent (10%) of the mayors of the department, or their delegates, who will be elected in accordance with what is pointed out by the General System Rector Commission in relation to the elections of representatives of mayors to the collegiate bodies of administration and decision ".

The members of the Regional Competitiveness Commissions may be invited to the sessions of the departmental, regional and science, technology and innovation OCDAs in the framework of the Competitiveness, Science, Technology and Innovation. This participation shall be ad honorem and shall not be binding.

Vigency Notes
Previous Legislation

The Board of Directors and Decision of the districts and municipalities shall be composed of a delegate of the National Government, the Governor of the respective department or its delegate and the Mayor.

The decisions of these Collegiate Bodies of Administration and Decision of departments, municipalities and districts in which the second paragraph of Article 361 of the Political Constitution is dealt with shall be adopted with a minimum of two favourable votes. The number of votes will be maximum three (3), one for each level of government, as well: National Government one vote; departmental one vote; and municipal and district one vote. The presence of at least one of the members of each level of government is necessary for the decision-making.

The participation in these collegiate bodies of administration and decision is ad honorem. The National Government shall regulate the election of its members and the functioning of the members.

Under the second paragraph of paragraph 2 of Article 361 of the Constitution, the College of Administration and Decision of the districts and municipalities shall operate for the entities benefiting from royalties and compensation resources where the revenue from this concept received in the year immediately above exceeds 2,000 smlv. The above, without prejudice to the exercise of the functions of the System of Monitoring, Monitoring, Control and Evaluation. For the other beneficiary entities, the Rectoring Commission will dictate guidelines for the formation of the respective Board of Directors and Decision.

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ARTICLE 43. IMPLEMENTATION OF THE INVESTMENT PROJECTS. The investment projects to be financed with the direct allocations shall be executed with strict application to the current contracting regime applicable to the respective entity.

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