Key Benefits:
819 OF 2003
(July 9)
Official Journal No. 45,243 of 9 July 2003
PUBLIC POWER-LEGISLATIVE BRANCH
For which organic rules on budget, accountability and fiscal transparency are dictated and other provisions are dictated.
COLOMBIA CONGRESS
DECRETA:
ORGANIC BUDGET RULES FOR FISCAL TRANSPARENCY AND MACROECONOMIC STABILITY.
ARTICLE 1o. Before June 15, the National Government will present to the Economic Commissions of the Senate and the House of Representatives, a Medium Term Fiscal Framework, which will be studied and discussed with priority during the first debate of the Annual Budget Law.
This Frame will contain at least:
(a) The Financial Plan contained in Article 4 of Law 38 of 1989, as amended by Article 55 5) of Law 179 of 1994;
b) A multi-annual macroeconomic programme;
c) The primary surplus targets referred to in Article 2or in this law, as well as the level of public debt and an analysis of its sustainability;
d) A report of macroeconomic and fiscal results of the previous fiscal year. This report should include, in the event of non-compliance with the targets set in the Medium Term Fiscal Framework of the previous year, an explanation of any deviation from the targets and the necessary measures to correct them. If the primary surplus target of the previous year has been breached, the new Medium Term Fiscal Framework has to reflect an adjustment that ensures the sustainability of public debt;
e) An assessment of the main quasi-fiscal activities carried out by the public sector;
f) An estimate of the tax cost of existing exemptions, deductions, or tax rebates;
g) The tax cost of laws sanctioned in the previous tax term;
h) A ratio of contingent liabilities that could affect the financial situation of the Nation;
i) In any budget, budget management indicators should be included, as well as the results of the disaggregated objectives, plans and programs for greater control of the budget.
ARTICLE 2o. PRIMARY SURPLUS AND SUSTAINABILITY. Each year the National Government will determine for the next fiscal term a primary surplus target for the non-financial public sector consistent with the macroeconomic program, and indicative targets for the primary surpluses of the following ten (10) fiscal vigencies. All in order to ensure debt sustainability and economic growth. This goal will be approved by the National Council for Economic and Social Policy, Conpes, after the Superior Council for Fiscal Policy, Confis.
The primary surplus targets adjusted for the economic cycle, on average, will not be lower than the primary structural surplus that guarantees debt sustainability.
The elaboration of the primary surplus target will take into account macroeconomic assumptions, such as interest rates, inflation, economic growth and exchange rate, determined by the Ministry of Finance and Public Credit, the Department of Finance. National Planning, and the Bank of the Republic.
Without prejudice to the limits to the operating expenses set forth in Law 617 of 2000, or in those laws that modify or add to it, the departments, districts and municipalities of special categories, 1 and 2 shall establish a primary surplus target for each currency in order to ensure the sustainability of their respective debt in accordance with the provisions of Law 358 of 1997 or those laws that the modify or add. The primary surplus target that guarantees the sustainability of the debt will be fixed by the Trust or the corresponding Secretariat of Finance and approved and reviewed by the Governing Council.
PARAGRAFO. The primary surplus is the positive value resulting from the difference between the sum of the current income and the capital resources, different from credit disbursements, privatisations, capitalizations, profits of the Bank of the Republic (for the case of the Nation), and the sum of the operating expenses, investment and commercial operating expenses.
ARTICLE 3o. CONTINGENT LIABILITIES. The valuations of new contingent liabilities resulting from the holding of public credit operations, other administrative contracts and judgments and reconciliations whose processing is carried out with After the entry into force of Law 448 of 1998, they will be approved by the General Directorate of Public Credit of the Ministry of Finance and Public Credit and will be handled in accordance with that established in the law. The valuation of the contingent liabilities perfected prior to the validity of the aforementioned Law 448 of 1998, will be carried out by the National Department of Planning, based on established procedures. by this entity.
ARTICLE 4. BUDGET CONSISTENCY. The draft General Budget of the Nation and the draft budget of the entities with budgetary regime of industrial and commercial enterprises of the State engaged in non-financial activities and mixed-economy companies treated as such shall be consistent with the provisions of Article 1a), (b) and (c) of this Law.
In the same way, modifications or additions to the Annual Budget Laws that are approved by the Congress of the Republic will have to respect the Fiscal Framework of the Medium Term foreseen in the approval and discussion of the law that is intended modify or add.
ARTICLE 5o. MEDIUM-TERM FISCAL FRAMEWORK FOR TERRITORIAL ENTITIES. Annually, in the departments, in the districts and municipalities of special category, 1 and 2, as of the duration of this law, and in the municipalities of categories 3, 4, 5 and 6 to From the beginning of 2005, the Governor or Mayor must present to the respective Assembly or Council, for information, a Medium Term Fiscal Framework.
This Framework will be presented in the same period in which the draft budget is to be submitted and must contain at least:
(a) The Financial Plan contained in Article 4 of Law 38 of 1989, as amended by Section 5 of Law 179 of 1994;
b) The primary surplus targets referred to in Article 2or in this law, as well as the level of public debt and an analysis of its sustainability;
c) The specific actions and measures that support the fulfillment of the goals, with their corresponding execution schedules;
d) A report of tax results from the previous tax term. This report should include, in the event of non-compliance with the targets set in the Medium Term Fiscal Framework of the previous year, an explanation of any deviation from the targets and the necessary measures to correct them. If the primary surplus target of the previous year has been breached, the new Medium Term Fiscal Framework has to reflect an adjustment that ensures the sustainability of public debt;
e) An estimate of the tax cost of existing tax exemptions in the previous term;
(f) A ratio of the liabilities payable and contingent liabilities that may affect the financial position of the territorial entity;
g) The tax cost of the projects of ordinance or agreement sanctioned in the previous tax term.
ARTICLE 6o. CONSISTENCY OF THE BUDGET FOR THE TERRITORIAL ENTITIES. The draft General Budget of the territorial entity and the draft budget of the entities of the territorial order with budgetary regime of industrial enterprises and State trade and mixed-economy companies treated as such must be consistent with the provisions of the preceding article, b and c.
ARTICLE 7o. ANALYSIS OF THE TAX IMPACT OF THE RULES. At all times, the tax impact of any bill, ordinance or agreement, which orders expenditure or which grants tax benefits, must be made explicit and must be compatible with the Framework. Medium-term Fiscal.
For these purposes, the tax costs of the initiative and the source of additional income generated for the financing of this cost must be expressly included in the explanatory statement and in the respective processing papers.
The Ministry of Finance and Public Credit, at any time during the respective procedure in the Congress of the Republic, will have to render its concept in the face of the consistency of the provisions of the previous paragraph. In no case will this concept be in the way of the Medium-Term Fiscal Framework. This report will be published in the Congressional Gazette.
The government's bills of initiative, which will raise additional spending or a reduction in revenue, will have to contain the corresponding substitute source for decreased spending or income increases, which will have to be analyzed and approved by the Ministry of Finance and Public Credit.
In the territorial entities, the procedure provided for in the preceding paragraph will be set before the respective Secretariat of Finance or who will do its own times.
FISCAL DISCIPLINE BUDGET ORGANIC RULES.
ARTICLE 8o. REGULATIONS FOR BUDGET PROGRAMMING. The preparation and preparation of the general budget of the Nation and of the Territorial Entities shall be subject to the corresponding Medium-Term Fiscal Frameworks in such a way that the Budget appropriations approved by the Congress of the Republic, the Assemblies and the Councils, can be implemented in full during the corresponding fiscal period.
In the event of a tender, merit contest or any other process of selecting the contractor with all legal requirements, including the availability of the budget, and its improvement is carried out in The following fiscal life will be met with the budget of this last term, prior to the implementation of the corresponding budget adjustments.
PARAGRAFO TRANSIENT. The precept in this article will begin to govern, after the following transition is completed:
Thirty percent (30 percent) of the reserves of the General Budget of the Nation and of the Territorial Entities that will be constituted at the end of the fiscal year of 2004 will be handled by the 2005 budget. In turn, seventy percent (70%) of the reserves of the General Budget of the Nation and of the Territorial Entities that are constituted at the end of the fiscal year of 2005 will be addressed to the budget of the year or 2006.
For which, the National Government and the Territorial Governments, respectively, will make the corresponding adjustments by decree.
ARTICLE 9o. MANDATORY INFORMATION. Companies or companies where the Nation or its decentralized entities have a share in their share capital of more than fifty percent (50%) shall report, within their powers, to the Ministry of Hacienda y Crédito Público and the National Department of Planning, the information of a budgetary and financial nature that is required in order to comply with this law.
ARTICLE 10. ORDINARY FUTURE VIGENCIES. Article 9or Act 179 of 1994 will thus remain:
The Trust may authorize the assumption of obligations that affect future vigentias ' budgets when its execution is initiated with a budget of the current term and the object of the commitment is carried out in each one of them as long as it is satisfied that:
(a) The maximum amount of future vigencies, the term and conditions of the future vigencies, refer to the multi-annual goals of the Medium Term Fiscal Framework as referred to in Article 1or this law;
b) At a minimum, of the future vigencies that are requested, the appropriation of 15% (15%) must be counted in the tax period in which they are authorized;
(c) In the case of national investment projects, the prior and favorable concept of the National Department of Planning and the Ministry of the Industry should be obtained.
The authorization by the Confis to commit a budget from future vigencies will not be able to exceed the respective period of government. The investment expenditure projects are excepted in those cases where the Conpes has previously declared them of strategic importance.
This provision shall also apply to the entities concerned by Article 9 of this Law. The government will regulate the matter.
The Ministry of Finance and Public Credit, Directorate General of the National Public Budget, will include in the draft budget the appropriations necessary to comply with the provisions of this article.
PARAGRAFO. These functions may be delegated by the Confis to the Directorate General of the National Public Budget of the Ministry of Finance and Public Credit for the case of the organs that make up the budget. General of the Nation and in the Boards or Boards of Directors in the case of the entities from which the numeral 4 of article 10 of Law 179 of 1994 is treated. The National Government will regulate the matter.
In the event of such a delegation, whoever is delegated by the Confis will submit a quarterly report to that Council on future vigencies authorized in the immediately preceding quarter.
ARTICLE 11. EXCEPTIONAL FUTURE VIGENCIES. Article 3or Act 225 of 1995 will remain so:
The Superior Council of Fiscal Policy, Confis, in exceptional cases for the works of infrastructure, energy, communications, aeronautics, defense and security, as well as for the guarantees to the concessions, will be able to authorize obligations affecting the budget of future vigencies without appropriation in the budget of the year in which the authorisation is granted. The maximum amount of future vigencies, the term and the terms of the future will be required to consult the multi-annual goals of the Medium Term Fiscal Framework referred to in Article 1or this law.
The Trust's executive secretary will send the congressional economic commissions on a quarterly basis to a relationship of the authorizations approved by the Council, for these cases.
To assume obligations that affect the budgets of future vigencies, the borrowing contracts and the compensatory contracts that are stipulated in these contracts do not require the authorization of the Superior Council of Fiscal Policy, Confis. These contracts shall be governed by the rules governing public credit operations.
ARTICLE 12. ORDINARY FUTURE VIGENCIES FOR TERRITORIAL ENTITIES. In territorial entities, authorizations to commit future vigencies will be given by the respective assembly or council, on the initiative of the local government, after approval. by the Territorial Trust or the organ that does its times.
The assumption of obligations affecting the budgets of future vigencies may be authorised when their implementation is initiated with a budget of the current term and the object of the undertaking is carried out in each of them as long as it is Comply with:
(a) The maximum amount of future vigencies, the time limit and the terms of the future vigencies, refer to the multiannual goals of the Medium Term Fiscal Framework as referred to in Article 1 of this Law;
b) At a minimum, of the future vigencies that are requested, the appropriation of 15% (15%) must be counted in the tax period in which they are authorized;
c) In the case of projects involving national investment, the prior and favorable concept of the National Planning Department should be obtained.
The popular choice corporation will refrain from granting the authorization if the projects subject to the future validity are not included in the respective Development Plan and if they add all the commitments that are intended to be acquired by the modality and its future maintenance and/or administration costs, it exceeds its borrowing capacity.
The authorization by the Confis to commit a budget from future vigencies will not be able to exceed the respective period of government. Investment expenditure projects are exempted in cases where the Governing Council has previously declared them of strategic importance.
In territorial entities, approval of any future validity shall be prohibited in the last year of the government of the respective mayor or governor, except for the conduct of related public credit operations.
PARAGRAFO transient. The prohibition set out in the foregoing paragraph shall not apply to the present period of Governors and Mayors, provided that this is necessary for the implementation of regional development projects approved in the National Development Plan.
ARTICLE 13. TAX LIABILITY IN THE RECRUITMENT OF STAFF FOR THE PROVISION OF SERVICES. The public servant responsible for the recruitment of staff for the provision of services that disclaims the provisions of the Laws 617 of 2000 and 715 of 2001 will be fiscally responsible.
RULES ON TERRITORIAL INDEBTEDNESS.
ARTICLE 14. TERRITORIAL ENTITIES ' ABILITY TO PAY. The payment capacity of the territorial entities will be analyzed for the entire duration of the credit that is contracted and if, in doing so, any of the two indicators established in the Article 6or Law 358 of 1997 is located above the limits provided therein, the territorial entity shall follow the procedures laid down in that law.
PARAGRAFO. For these purposes, interest projection and debt balance will take into account the rate of interest rate and exchange rate risk coverage that will be defined quarterly by the Banking Superintendence.
ARTICLE 15. TREASURY LOANS IN TERRITORIAL ENTITIES. The treasury credits granted by financial institutions to the territorial entities shall be used exclusively to address temporary cash insufficiency during the period of validity of the cash Tax and must meet the following requirements:
(a) Treasury appropriations shall not exceed the twelfth of the current revenue of the fiscal year;
b) They will be paid with different credit resources;
(c) They must be paid with interest and other financial charges before December 20 of the same duration as they are contracted;
(d) They may not be contracted as soon as cash credits are in arrears or overdrafts.
ARTICLE 16. CLASSIFICATION OF TERRITORIAL ENTITIES AS CREDIT SUBJECTS. Without prejudice to the provisions of the foregoing Articles, and the provisions contained in the rules of territorial indebtedness, for the procurement of new credits by the departments, districts and municipalities of special categories, 1 and 2 shall require the submission of an assessment drawn up by a risk rating, monitored by the Superintendence in which the capacity of the contracting the new debt.
PARAGRAFO. The application of this article will be mandatory from January 1, 2005.
ARTICLE 17. LIQUIDITY SURPLUS PLACEMENT. Territorial entities shall invest their transitional liquidity surpluses in Nation's Internal Public Debt Titles or in securities that have a high credit risk rating or that are deposited with financial institutions rated as low credit risk.
PARAGRAFO. The Territorial Entities will be able to continue to place their surplus of liquidity in the Development and Development Institutes while the latter obtain the credit rating of low credit risk, for which they will have a period of one (1) year from the date of this law.
ARTICLE 18. LIMIT TO THE CARRYING OUT OF CROSS-CREDITS. The Institutes of Development and Development or financial institutions owned by the territorial entities may carry out active credit operations with the territorial entities provided that when they do so under the same parameters as for financial institutions monitored by the Banking Superintendency.
ARTICLE 19. RESTRICTIONS ON THE NATION ' S SUPPORT. Without prejudice to restrictions laid down in other rules, the Nation is prohibited from granting direct or indirect financial support to territorial entities that do not comply with the provisions of the href="ley_0358_1997.html#1"> 358 of 1997 and this law. Consequently, the Nation will not be able to provide resources, co-finance projects, guarantee public credit operations or transfer any kind of resources, other than those mentioned in the Political Constitution.
ARTICLE 20. LIMITS ON DEBT OWED TO THE NATION. No territorial entity may conduct public credit operations that increase its net borrowing when it is in arrears due to public credit operations contracted with the country. National Central Government or guaranteed by it.
ARTICLE 21. CREDIT CONDITIONS. The financial institutions and the institutes of territorial development and development to grant credits to the territorial entities, will require compliance with the conditions and limits established by the Law 358 of 1997, Law 617 of 2000 and this law. The credits granted from the validity of this law, in breach of the provisions, will not be valid and the beneficiary territorial entities will proceed to their cancellation by return of the capital, being prohibited the payment of interest and other financial charges to the creditor. As long as the cancellation does not occur, the restrictions set forth in this law shall apply.
OTHER PROVISIONS.
ARTICLE 22. LIABILITY IN CLAIMS TO PUBLIC ENTITIES IN LIQUIDATION.
ARTICLE 23. COASSET COLLECTION OF SURPLUS. Documents that the National Council for Economic and Social Policy, Conpes, issue under Articles 5or 6or Law 225 of 1995, provide executive merit for the collection of capital and its corresponding arrears interest. For the determination of the amount of the default interest, the Conpes will request the information from the National Treasury Department of the Ministry of Finance and Public Credit.
In these cases the Ministry of Finance and Public Credit is the competent entity to advance the performance of coactive collection.
ARTICLE 24. REPRESENTATION OF THE INTERESTS OF THE NATION IN PUBLIC SERVICE COMPANIES. In the assemblies and boards of the utilities in which the Nation has shareholding, the interests of the The nation will be represented by officials from the personnel plant of the Ministry of Finance and Public Credit. These officials will be required to report on the decisions in which they would have participated when requested by the Minister.
ARTICLE 25. FISCAL LIABILITY IN PORTFOLIO RESTRUCTURING. Financial institutions of a public nature when carrying out restructurings of loans, rebates or interest grants to their defaulting debtors shall carry out such restructuring in accordance with the general conditions of the financial market and with the aim of: recovering your portfolio, avoiding the deterioration of your financial and budgetary structure and, propender for the defense, profitability and recovery of the public patrimony.
ARTICLE 26. Failure to comply. Failure to comply with this law by the responsible public servants, at the corresponding level of the public administration, shall be considered to be a disciplinary failure, in accordance with the provisions of the href="ley_0734_2002.html#1"> 734 from 2002 for effect.
ARTICLE 27. TRAINING AND TECHNICAL ASSISTANCE TO TERRITORIAL ENTITIES. For the proper implementation of this law, the Ministry of Finance and Public Credit and the National Department of Planning, training and technical assistance will be in charge. to territorial entities.
ARTICLE 28. VALIDITY AND REPEAL. This law governs from the date of its enactment.
The President of the honorable Senate of the Republic,
LUIS ALFREDO RAMOS BOTERO.
The Secretary General of the honorable Senate of the Republic,
EMILIO RAMON OTERO DAJUD.
The President of the honorable House of Representatives,
WILLIAM VELEZ MESA.
The Secretary General of the honorable House of Representatives,
ANGELINO LIZANO RIVERA.
COLOMBIA REPUBLIC-NATIONAL GOVERNMENT
PUBLISH AND COMPLY.
Dada in Bogotá, D. C., on July 9, 2003.
ALVARO URIBE VELEZ
The Minister of Finance and Public Credit,
ALBERTO CARRASQUILLA BARRIER.
