DRAFT LAW NO. 606 /X

(Amendment to Law No. 19/2003 of June 20-Law of the Financing of Political Parties and Campaigns

Electoral)

Exhibition of Motives The funding of the Political Parties and election campaigns is of the most delicate and sensitive subjects of the rule of law and their regulation is essential to the functioning of democracy. It is known, among us, the debate on the option between public and private funding, with the mixed solution being consecrated a long time ago. Solution this which privileges the tendentially public financing of parties and electoral campaigns, being allowed only donations from natural persons, within certain limits, duly titled by cheque or bank transfer. The present legislative initiative introduces corrections and enhancements to the Law on the Financing of Political Parties and election campaigns, aiming to achieve greater rigor and transparency. Those corrections and enhancements arise from the experience resulting from the practical application of the law that now changes. It is never to further perfect the legislative instruments that regulate political activity, eliminating misconceptions and clarifying procedures, so as to ensure better quality and greater credibility to the institutions of the Democratic State. It matters, above all, and in a strengthened manner, to ensure, in all cases, the full transparency of party funding and the utmost rigour in the organization of the accounts of the Parts and the election campaigns. Such a dismay is not commiserated with any doubts or misconceptions in the field of the competences of the supervising instances.

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The issue of transparency in the field of partisan finance today integrates the agenda of several instances, as, incidentally, it reveals the recent proposal of the European Parliament and of the Council amending Regulation (EC No 2004/2003) on the Statute and the Funding for Political Parties at the European level. It proposed that which merited assent from the European Affairs Committee and the Committee on Constitutional Affairs, Rights, Freedoms and Guarantees, of the Assembly of the Republic. In the case of the current law, it appears to be peaceful for the assignment, in exclusive, of the supervisory competence of the accounts of the Parts, to the Constitutional Court, including the public funds-ment component, for, it is this instance that intervenes, since always, in the institutionalization and in the control of the legal existence of the Political Parties. Incidentally, for so much, it has apetted that Court with the appropriate counsel, through the Entity of Accounts and Political Financing, that the coadjuvance technically, as provided for in Article 24º of Law No. 19/2003 of June 20, and whose organization and operation has its seat in the Organic Law No 2/2005 of January 10. The time that takes effect of Law 19/2003, of June 20 and the Jurisprudence, highly pedagogical, that the Constitutional Court, as an entity with exclusive jurisdiction over the accounts of the Parts and all its organs, has been producing, impose that, in this opportunity, some corrections, updates and aclarations in that Act are introduced. The experience of these years of concrete application, whether in partisan life, is in the seat of exercise of the supervisory powers, cannot fail to be taken into due account. Thus, with the concern of improvement and enlightenment, in favor of the transparency of party funding, it eliminates Article 7 (4), which considers donations "the acquisitions of goods to political parties by amount manifestly superior to their respective market value" , as per (b) of paragraph 3 of the

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Article 8 expressly prohibits the practices referred to in the legal provision now disposed of, to which, in a somewhat equivocal manner, ended up by admitting them as donations, which must be fully sidelined. It is clear from the rest, that they are void the legal business practised in contravention of the provisions of Art. 3. 8. The planned public subsidy for the second round of the presidential elections comes as manifestly insufficient, and although the campaign period is shorter than that of the first round, it has understood to proceed to its reinforcement, in a more reasonable. Being the public grant, within the framework of the partisan funding, assigned depending on the election results and the respective representativeness, it is shown to be appropriate, at this opportunity, to take into account the reasons that the Small Parts, who do not benefit from that grant, come publicly presenting in the matter of the simplification of their accounting. Adding that, at present, the reference unit for the purpose of calculating the public subsidy allocated to political parties and parliamentary groups-Law No. 19/2003 of June 20 and the Law on Organization and Functioning of Assembly Services of the Republic, republished by Law No. 28/2003, of July 30-is the guaranteed monthly minimum consideration, which is currently designated by national minimum wage. It is found, however, that such remuneration has, in recent years, been suffering increases of some relevance, and it is foreseeable that this trend will even be accentuated, which would imply excessive growth of the public subsidy, of all incompatible with the financial constraints to which the state has been obligated. Thus, and as a succeeding, it is adopted, however appropriate and more consenting to the difficulties that the Country traverses, the Indexing of Social Supports (IAS) that will allow to ensure, in the future, that the public subsidy to political parties and groups parliamentarians to contain themselves within reasonable parameters, without prejudice to, transiently, apply for guaranteed monthly minimum consideration set for the year 2008.

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On the other hand, the right to state subsidy for the coverage of the expenditure of the campaigns relating to municipal mid-term elections is to be secured, too, when it is at issue only the election for any of the organs of the Municipality. It is also the case that the Act is currently silent on the funding of the campaigns for the elections to the political parties ' own bodies. Without prejudice to its regulation it should fit the Statutes and Internal Regulations of the respective Parts, it shall not owe the Act alhearse, of the need for the greatest transparency as to the financing of such campaigns. Here's what explains the consecration of the legal requirement of publission of the accounts of such campaigns. Pese although it is found that, in matters of Referendity, either at the national level or at the regional and local level, there is a legal gap regarding the financing of the respective campaigns, it is understood that it should be the subject of regulation in its own headquarters, or is, in a timely change to the Referendum Act. In fact, it is acts that, by their very nature, far outweigh the partisan scope. It is also relevant that the new rules, with the established transitional caveats, have already been implemented in the next budgetary and economic year, being known to their recipients, with the necessary advance in advance, in order to ensure the its observance since the beginning of the financial year 2009. Dealing, as it is, of mere upgrades, enhancements, clarifications and corrections, comumely taken by necessary, without changing, in substantive terms, the basic solutions already adopted, it is desirable, equally, to obtain the greater consensus possible, for the present initiative. Thus, in the applicable constitutional and regimental terms, the undersigned MPs present the following Draft Law:

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Article 1º Articles 3º, 5º, 7º, 8º, 10º, 12º, 15º, 16º, 17º, 18º, 19º, 20º, 21º, 21º, 22º, 22º, 22º and 27º of Law No 19/2003 of June 20 and is added a new art are added. 22º-A to the same diploma, as follows:

" Article 3º [...]

1. Constituts own revenue of the political parties: a) ...... b) ...... c) ......

d) the product of fundraising activities by them developed, in which they include all actions that are not vetted by them by Law;

e) the income from its heritage specifically, leases, rentals or financial applications;

f) the product of the disposal of goods or of the provision of services, without prejudice to the provisions of paragraph 3 (b) of the art. 8º;

(g) (h) Current paragraph (g); (i) Current paragraph (h); 2. The revenue referred to in the preceding paragraph, when of a nature

pecuniary, are compulsorily titled by means of cheque or by other means of banking that allows the identification of the amount and its origin and deposited into bank account exclusively intended for this purpose, in which only deposits that have that origin may be carried out.

3. ...... 4. ......

Article 5º

[...] 1. ......

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2. ...... 3. ...... 4. Each Parliamentary Group is assigned, annually, a

grant for advice charges to Deputies and other operating expenses corresponding to forty-eight IAS plus half of that value, per Member, to be paid on a monthly basis, pursuant to paragraph 6.

5. The Parliamentary Groups originating in Parts who have agreed in coalition to the electoral act shall be considered as one Parliamentary Group for the purposes of the preceding paragraph;

6. The grants previously referred to are paid in twelfth, on account of special appropriations for that purpose entered in the Budget of the Assembly of the Republic.

7. The grant provided for in numbers 1 and 2 is also granted to the Parts who, having agreed to the election to the Assembly of the Republic and not having achieved parliamentary representation, obtain a number of votes higher than 50000, provided that they require it to the President of the Assembly of the Republic.

Article 7º [...]

1. ...... 2. ...... 3. Without prejudice to the acts and personal contributions of the

militant activity, the remaining donations in kind, as well as the goods yielded to loan are considered, for the purposes of the limit set out in paragraph 1, by their current value in the market and shall be discriminated against in the list referred to in point (b), of paragraph 3, of the art. 12º.

4. Eliminated.

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Article 8º [...]

1. ...... 2. ...... 3. ......

(a) to acquire goods or services by prices manifestly lower than the values practiced in the market;

b) ...... c) ......

4. The legal business concluded in violation of the provisions of the paragraphs. 1 and 3 are nulls.

Article 10º [...]

1. ...... a) ...... b) ...... c) Municipal Tax on the onerous Transmissions of

Real estate, by the acquisition of real estate intended for its own business and by the transmissions resulting from merger or spinoff;

(d) Municipal Corporation Tax on Real Estate on the taxable value of real estate or part of real estate of its property and intended for its activity;

e) ......; f) ......; (g) Tax on the value added in the rental, acquisition and

transmission of goods and services, including those used in election campaigns through any supports, printed, audio-visual or multimedia, used as a propaganda material, means of communication and transport, and rental of spaces intended to spread its political message or identity of its own, being the exemption being made through the exercise of the right to the refund of the tax;

h) ....... 2. ......

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3. Parts benefit from exemption from fees for justice and court costs, as well as notarial and register emoluments.

Article 12º [...]

1. ...... 2. ...... 3. ...... (a) ..... (b) ..... (c) The discrimination of expenses, which includes: The expenditure on the staff; The expenditure on the acquisition of goods and services; The contributions to election campaigns; The financial burden with loans;

The charges with the payment of the fines provided for in numbers 1 and 2 of Article 29º; Other expenditure on the party's own activity;

d) ..... 4. ....... 5. ...... 6. ...... 7. ...... 8. The Political Parties whose annual financial movement, excluding

expenditure on election campaigns, does not exceed 30,000.00 and that they are not entitled to the public subsidies provided for in Article 4º (a) and (c), may opt for a simplified accounting regime by filling and submitting an official model of accountability to be defined by joint porterie of the Ministry of Justice and Finance.

9. They are also attached to the national accounts of the parties ' accounts of parliamentary groups, when they exist.

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Article 15º [...]

1. ...... 2. In the election campaigns for the organs of local authorities,

the account has municipal basis, without prejudice to the existence of account relating to common and central expenditure, which has as a final result limit a maximum value equal to 10% of the overall permissible limit for the pool of municipal applications presented.

3. Only invoices or campaign expenditure documents are admissible, which report to a period not exceeding the twelve-day period subsequent to the holding of the electoral act and to tell them demonstrably, excepted expenditure directly related to the closure and provision of accounts.

4. In the election campaigns for the organs of the authorities will only be able to borrow bank loans in the account corresponding to the common and central expenditure.

5. Current n. 3. 6. Until the last day of the deadline for the delivery of the applications, the

candidates, parties, coalitions and groups of citizens voters present to the Constitutional Court their campaign budget, in accordance with the provisions of this Law.

7. Campa-budgets are made available on the official website of the Constitutional Court in the Internet from the third day after its delivery.

Article 16º [...]

1. ...... a) ...... (b) ...... (c) Donations of natural persons supporter of the applications; d) ... 2. ......

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3. Donations provided for in points (c) and (d), paragraph 1 may be obtained by using fundraising, albeit in the context of a campaign directed towards the effect, being subject to the limit of 60 IAS per donor, and are compulsorily titled by cheque or by another bank means that allows the identification of the amount and its origin.

4. The revenue referred to in the preceding paragraph, when referring to the last day of the campaign, shall be deposited on the first working day following;

5. The use of the assets allocated to the political party's heritage, as well as the collaboration of militants, sympathizers and supporters is not considered, nor as revenue, nor as a campaign expenditure.

Article 17º [...]

1. ...... 2. ...... 3. ...... 4. ...... 5. ...... 6. ...... 7. In case of municipal mid-term elections there will be place

grant equal to that provided for in the preceding paragraph, if elections are due to the Municipal Assembly and the City Hall and half in the case of dealing with elections only for the City Hall.

8. The grant referred to in the preceding paragraph shall be requested by application instructed with a statement by the financial representative with the overall estimate of the expenditure and revenue as well as the planned grant.

9. Up to the fixation of the final values, the Assembly of the Republic shall make the advance, within a maximum of 15 days, from the application delivery, of the amount corresponding to 50% of the estimated value for the grant.

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10.Caso the grant is not paid within 60 days, from the delivery of the application provided for in paragraph 6, shall vende interest on the statutory rate applicable to the debts of the State.

11.O financial representative referred to in paragraph 8 shall be personally liable for the monies improperly received, which shall be returned by the date of the provision of the accounts of the campaign referred to in paragraph 1 of Article 27º.

Article 18º [...]

1. ...... 2. ...... 3. ...... 4. The grant cannot, in any case, surpass the value

of the expenses actually incurred, deducted from the amount accounted for as from donations from natural persons and fundraising shares.

5. ......

Article 19º [...]

1. Consideration of election campaign expenses are considered

by the applications or for these, with an aim or electoral benefit within the six months immediately prior to the date of the respective electoral act.

2. ..... 3. .....

Article 20º

[...] 1. ......

a) 10000 times the value of the IAS in the election campaign for President of the Republic, increased from 5000 IAS in the case of running for second round;

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b) ....... c) ....... d) .......

2. ...... 3. ...... 4. ...... 5. ......

Article 21º

[...] 1. By each campaign account is constituted a mandatary

financial to whom it is up to the respective scope, the acceptance of the donations provided for in paragraph 1 (c) of Article 16º, the deposit of all revenue and the authorization and control of the campaign expendities, as well as all obligations arising from the recommendations emanating from the Constitutional Court for each electoral act.

2. The national financial representative may appoint financial representative of district or regional scope when dealing with elections to the Legislative or European Assemblies, or of a local scope when dealing with municipal elections, which shall be responsible for the acts and omissions that in the respective scope are charged to it in the fulfillment of the provisions of this Law.

3. ...... 4. Within 30 days after the end of the term of delivery of lists

or application for any electoral act, the party, the coalition, citizens groups or the candidate for President of the Republic promotes the publication, in a national circulation newspaper, of the complete list of financial mandants.

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Article 22º [...]

1. ...... 2. The first candidates from each list or the first bidder

of each group of citizens candidates for any electoral act, depending on the cases, are mainly responsible with the financial mandators.

3. Financial mandators respond in judgment by the conclusion of contracts that can translate into obligations for applications.

CAPITCHAPTER IV

Financing of the campaigns for the internal elections in the Political Parties

Article 22º-A Advertising of Accounts

The applications to the internal elections for the organs of the Political Parties present and disseminate the budgets, revenues and expenditure of the campaigns in accordance with the stipulation in the Statutes and Regulations of the respective Parties.

Article 27º [...]

1. Within the maximum period of 90 days, in the case of municipal elections,

and 60 days, in the remaining cases, after payment of the public grant, each application provides the Constitutional Court with the discriminated accounts of its election campaign pursuant to this Law.

2. ...... 3. ...... 4. ......

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5. ...... 6. ...... "

Article 2º

1. The references made in the current wording of Law No. 19/2003, of

June 20, and of the Law of Organization and Functioning of the Services of the Assembly of the Republic, republished by Law No. 28/2003 of July 30, to the national minimum wage consider themselves to be reported to the Indexing of Social Supports, abbreviately designated by IAS, created by Law No. 53-B/2006 of December 29, as a reference value of the public grant.

2. The predicted in the preceding paragraph shall take effect from the year in which the amount of the Social Apoios indexer achieves the value of the guaranteed monthly minimum consideration set for the year 2008.

3. While the convergence referred to in the preceding paragraph does not occur, the amounts of the public grants of party funding, including parliamentary groups, election campaigns and fines, retain the value of 2008.

4. Article 47 of the Law on Organization and Functioning of the Services of the Assembly of the Republic, republiced by Law No 28/2003 of July 30, is repealed.

Article 3º 1. Parliamentary Groups, when they exist, dispose of

own taxpayer numbers, while also giving them applicable, the rights and obligations of a tax nature set out in the law for political parties.

2. Dispose, equally, of number of own taxpayer: a) The coalition of parties candidates for any act

electoral; b) The groups of citizen voters candidates for any

election act. 3. The own taxpayer numbers previously referred to are

assigned, once the applications have been admitted, at the beginning of each

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election campaign and expire with the submission of the respective bills to the Constitutional Court.

Palace of Saint Benedict, November 20, 2008

The Deputies,