First Amendment To The Organic Law No. 1/2007, Of 19 February (Approved The Finance Law Of The Autonomous Regions, Revoking The Law No. 13/98, Of 24 February)

Original Language Title: Primeira alteração à Lei Orgânica n.º 1/2007, de 19 de Fevereiro (Aprova a Lei de Finanças das Regiões Autónomas, revogando a Lei n.º 13/98, de 24 de Fevereiro)

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Read the untranslated law here: http://app.parlamento.pt/webutils/docs/doc.pdf?path=6148523063446f764c3246795a5868774d546f334e7a67774c336470626d6c7561574e7059585270646d467a4c31684a4c33526c6548527663793977634777784c56684a4c6d527659773d3d&fich=ppl1-XI.doc&Inline=false

BILL nº 1/XI/1. ª BILL nº 1/XI/1. ª à ƒ ‡ CHANGE the FIRST is € ‚ ONLY ORGANIC LAW Nr 1/2007, of 19 February, which approves the law of FINANCE ‡ of • REGION STANDALONE “ NOMAS ES the Organic Law nº 1/2007 single, February 19 , came to approve the finance law of µ s Standalone Region ³ nomas, revoking the Law Nr 13/98, of 24 February. However, and given the fact that many questions about your constitutionality and legality have been raised, "appropriate a review of your content with a view to full compliance with the provisions of the Constitution of the Portuguese Republic and the statutes of the Administrative-Poland Region ³ µ s Standalone nomas of ores and wood action. Thus, as regards the references made to ³ nio regional heritage, provided for either in the final part of the article 2nd, both in AS title V, chose to proceed to your elimination of because you want your defining the competence for the your inventory management are already in the Constitution and the statutes of the Administrative-Poland. Take advantage to consecrate the princà pio of financial autonomy, establishing both a constitutionally more consentà vision ¢ nea with the definition of national solidarity princà pio. In this sense, the adjustment of fan ³ costing formula of transfers from the State budget, in order to enforce the statutorily enshrined, restoring, in simultaneous, the white balance brio between µ s regions Autonomous ³ nomas, without, however, diminishing the amounts that the State has in store for the region Autonomous ³ noma of action ores. In this framework, improved § ¢ oa-the concept of projects of common interest that beneficiarà the comparticipaà of State once approved by their respective Governments. Similarly, the rule of the loans, to be issued by Standalone ³ µ s nomas Region may benefit from personal guarantee of the State, in accordance with its law, achieved ando-if that full compliance with the established statutorily. Similarly, expurgam the law references of previous article 62° à transfer µ s assignment and competency necessary substances to exercà heat 2 tax power, since such raw rias are already enshrined in Decree-Law nº 18/2005, of 18 January, which transferred to the Autonomous Region of Madeira noma ³ the µ s assignment and competency tax preferences on the part of the Direction of Finance of the ³ noma, standalone and all dependent services, being carried on in the territory by ³ River region by the Government of the Republic, the Regional Government of the Autonomous Region of Madeira the noma exercà ³ cio full of competence laid down in this Constitution and in the law in relation to tax revenues next ³ own, practicing all acts required is your personnel administration and management, even in matter of taxation , establishes that in the discharge of the value added tax (VAT) is applied the suspensive arrangement, because it is the method that ensures, with greater reliability, the µ s Standalone Region ³ nomas will receive tax revenues that are due them. In order to make good any loss of VAT revenue, predicts th a safeguard clause, which guarantees the µ s Region, in the year 2008, a revenue level identical to that achieved by the application of the princà pio of capitaà in 2007. Finally, in the framework of the adopting of the official plan of public accounts and taking into account the uniqueness of the national system, µ and Empire-if the obligation of the State to provide the Region Autonomous ³ µ s nomas the µ s application computers integrated policies, as well as the technical support necessary for the fulfilment of this obligation, with a view to uniformizaà of procedures avoid additional costs with analyses and studies of µ s application computer practices that already exist. So: according to the nea f) handle Nr 1 of article 227 of the Constitution of the Republic and beyond nea b) Nr 1 of article 37 of Law Nr 13/91, of 5 June, amended by Laws nº s 130/99, of 21 August and 12/2000, of 21 June, the Legislative Assembly of Madeira offers is the Assembly of the Republic the following proposal of law : Article 1 change is only Organic Law nº 1/2007, of February 19 are amended articles 2nd, 3rd, 6°, 7°, 8°, 11°, 15°, 16th, 19°, 21° 25℃, 30°, 31°, 33°, 35°, 36°, 37º, 38°, 39°, 40°, 49°, 51°, 55°, 59Â, 61° 62°, 63°, and the Organic Law nº 65 nica Nr 1/2007, of February 19 , which redacà be replaced by the following: «Article 2nd [â € ¦] 3 for the purposes of the previous article, this law covers the matter relative to rias regional recipes, to power the prà ³ tax itself of µ s Standalone Region ³ nomas, adaptation of the national tax system and the relationships between financial µ µ s regions Autonomous ³ nomas and local authorities stationed in the Region Autonomous ³ µ s nomas. Artigo 3º
[…] …................................................................................................................................................. a) …..................................................................................................... b) Princípio da autonomia financeira regional; c) [previous in nea b)] d) [previous in nea c)] and) [previous in nea d)] f) pio Princà of territorial continuity; g) Princà pio of regionalizaà of services; h) [previous in nea and)] i) [previous in nea f)] j) [previous in nea g)] Article 6° [â € ¦] 1-regional financial autonomy develops within the framework of the princà pio budget amental stability, which assumes µ and, in the medium term, a situation the next of white balance ³ budget amental panache. 2-both the State as the Region Autonomous ³ µ s nomas recipro Cally contribute to the attainment of financial objectives, within the framework of the respective stability princà pio budgets. Article 7 [â € ¦] 1-pio princà national solidarity to ensure the promotion of the economic development and social ³ and the well-being and quality of life of the populace µ s, binds the State to bear the costs of inequality derived from insularity, in particular with regard to transport, communication, energy µ, education, culture, health, sports and social security with vista is the erasure of the 4 inequalities arising from the situation of island regions and outermost regions and the

conducting of convergà the ³ mica and social economic with the remaining territory by ³ national river and with the European Union. 2-the princà pio of national solidarity is newly proco and covers the national whole and each of its Regions µ s, and ensure a suitable level of public services and private activities, without sacrifà cios desigualitÃ. 3-(previous nº 2). 4-the princà pio national solidarity fits in each moment, to the level of development of µ s region. 5-(previous Nr 5). 6-(previous Nr 6). Article 8° [â € ¦] â € ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..) the balanced development of the whole national; b) …........................................................................................................ c) …........................................................................................................ Artigo 11º
[…] 1 - …................................................................................................................ a) …........................................................................................................... b) …........................................................................................................... c) …........................................................................................................... d) …........................................................................................................... e) …........................................................................................................... f) … ........................................................................................................... g) …........................................................................................................... h) …........................................................................................................... i) .............................................................................................................. 2 - …................................................................................................................

5 3 - …................................................................................................................ 4-the Council is advised by a technical Committee, constituà of one representative of each of its members, which is in particular, the evaluation, monitoring and appropriate wording of proposals for resolving any issues µ s resulting from the application of the law, the selection and valuation of projects of common interest the preparation of µ s meeting referred to the Nr 2, as well as the implementation of the measures taken under the same. Artigo 15º
[…] 1 - ................................................................................................................... 2-revenue collected in the Region Autonomous ³ µ s nomas by State services that are delivered directly to regional coffers must be applied in projects that improve the functionality and the functionality of these services. 3 - (Anterior nº 2) 4 - (Anterior nº 3) 5 - (Anterior nº 4) 6 - (Anterior nº 5) Artigo 16º
[…] …............................................................................................................. a) …...................................................................................................... b) …....................................................................................................... c) (Eliminado). Article 19° [â € ¦] 1-each recipe Is circunscrià the value added tax charged for the application of the suspensive arrangement, in accordance with the rules in force for the transacà of µ s intracomunitÃ, the µ s operation carried out with the remaining territory by ³ National River to import µ s and s µ s acquisition intracomunità various , and µ s operation on them, according to the criteria set out in paragraphs 2 and 3 n of article 1 of Decree-Law nº 347/85, of 23 August.

6 2-can in no case be adopted a way of calculation that results in a lower amount of revenue than received by the regime of capitaÃ. 3-(previous Nr 2) Article 21° [â € ¦] 1-â € ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... € ....) ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... b) â € ¦........................................................................................................... 2 - …................................................................................................................ 3 - …................................................................................................................ a) …........................................................................................................ b) …........................................................................................................ 4-is also revenue from each Autonomous Region ³ noma, the amount derived from the stamp duty due on the multiple betting your sports, determined in accordance with the scheme of the capitaÃ. Article 25℃ [â € ¦] Constitutes revenue of each Autonomous Region ³ noma the product fees, charges and prices payable for the services of regional services, by acts of removal of jurà limits doctors to particular activities of the jurisdiction of the à ³ body the regional authorities and the use of domestic goods regional public domain. Article 30° [â € ¦] 1-µ s Regions Autonomous ³ nomas may each year contract gives life founded in compliance with the maximum limit laid down in nº 4 of this article and does not match a wool or additional indebtedness in proportion than the State that year, calculated, for each region, in accordance with the princà pio of capitaÃ. 2-in the case of µ s Standalone ³ regions requires increased nomas wool or higher-than-expected debt the Nr 1, must obtain the opinion of the Board of favorà monitoring of Financial practices and Controversial approval of the Assembly of the Republic, to be granted in the framework of the law of the budget.

7 3-for the purposes of consideration of the debt limits are excepcionados wool net debt increases by µ g/s is related 

execution of projects co-financed by Community funds. 4-(previous Nr 3). 5-(previous nr 4). 6-(previous Nr 5). 7-debt balances or wool of a given year may be used in one of the three subsequent years. Artigo 31º
[…] 1 - …................................................................................................................ 2 - …................................................................................................................ 3-the reduction anticipated in the nº 1 will be used on amortization of give life region ³ noma its Standalone or, if such is not exequÃ, in increasing values © heater power intended for the financing of projects of common interest in this region. 33° Support Article of the Institute for the management of the Treasury and public credit , I. P. Standalone ³ µ s regions may use nomas to the support of the Institute for the management of the Treasury and public credit, I. P., both for the Organization of issuing µ s dà regional public life, both for the monitoring of your management, to reduce cost and risk and to coordinate operations µ s dà regional public life with the give direct public life of the State. Article 35° [â € ¦] The loans issued by Standalone ³ µ s nomas Region can benefit from personal guarantee of the State, in accordance with its law.

Article 36° Assunà of commitments of µ s Standalone Region ³ nomas 8 State the State can assume responsibility for obligations of the µ µ s Region Autonomous ³ nomas es and assume the commitments arising from these µ s obligation, in accordance with the law. Artigo 37º
[…] 1 - …................................................................................................................ 2 - …................................................................................................................ 3 - …................................................................................................................ 4-If the rate resulting from the previous less than Nr is rate of wage update the function public that same year applies this last rate. 5-(previous nr 4). 6-in the year of entry into force of this Act, the amount of the appropriations to be entered in the budget of the State for the year t equals 355,800,000 euros. 7-the distribution of this amount by µ s ³ nomas Standalone Region, taking account of their structural features, is made according to the following formula: ³ ï fan ƒ° ï ƒ° ï ƒ» ï ï ï ƒ ƒ ƒ ¹ th TH ƒ ' ï ï ï ï ƒ © € «€ «€ «ï € ï «ï € ï € ï € ï .5 € ï ï € ï € ï € ï € € 4 , 4, 2, 2, 2, 2, 2, 2, tR, 05, 0125, 0 14 14 05.0 65 65 05, 00, 725 tRA tR RA R tRA tRA tRA tRA tR tR tR EF EF UI UI P P P P P P TT Being: tR, T-transfer to the Autonomous Region in year t ³ noma; TRA, T-transferring to the Standalone ³ µ s Region in year t nomas, calculated in accordance with the provisions of this article 2 Nr; 2, ï € tRP-population of the Autonomous Region in year t ³ noma-2 according to recent data published by the INE is costing date; 2, ï € tRAP-sum of the population of the nomas ³ µ s Autonomic Region in year t-2; ï € 2.65 tRP-population of the Autonomous Region in year t ³ noma-2 with 65 years of age or older according to recent data published by the INE is costing date;

9 2.65 ï € tRAP-sum of the population of the nomas ³ Autonomous Region with 65 years of age or older in the year t-2; 2.14 ï € tRP-population of the Autonomous Region in year t ³ noma-2 with 14 or so years of age, according to recent data published by the INE is costing date; 2.14 ï € tRAP-sum of the population of the nomas ³ µ s Autonomic Region in year t-1 with 14 or fewer years old; RIU = RA R RA R DL DL ilhasn ilhasn ° ° 3, 07, 0 ï ‚ ï € ï ‚ ' ´ ´ RAIU-sum of the indexes of remoteness; RDL-distance between the capital of each Autonomous Region ³ noma and the capital of Paà s; RADL-sum of the distances between the capital of each of the Standalone ³ µ s nomas Region and the capital of Paà s; RilhasnÂ-number of Islands with population resident in the Autonomous ³ noma; RAilhasnÂ-total number of Islands with population resident in Standalone ³ µ s nomas Region; ï ‚ ï € EFR, € 4-FROG tï beginning between tax revenues of the noma, wool quidas ³ Standalone the corrective effect of VAT arising from the Nr 2 19° article of this degree, and any extraordinary tax rivers hits of previous years, and gross domestic product at market prices, current prices, in the year t-4; ï ‚ ï € EFRA, € tï 4 = sum of indicators of fiscal effort. 8-from the year t + 1, the apportionment structure resulting from the application of the criteria laid down in nº 7, cannot, under any circumstances, result in an amount for each Autonomous Region ³ noma less than the amount received in the previous year, updated in accordance with the provisions of this article 2 Nr, doing the necessary clearing of µ s by deduction of the amounts of the region Autonomous ³ noma that has a growth higher than that defined in even Nr 2. 9-(previous Nr 7).

Artigo 38º
[…]

10 1 - …................................................................................................................ 2-the Cohesiveness of the Fund has µ and in each year of funds from the State budget, to be transferred to the Regional budgets, to finance programmes and projects of investment, previously identified, which meet the requirements of the previous number and is equal to 35% of budget transfers amentais to every region Autonomous ³ noma defined pursuant to article 37. 3-The transfers provided for in this article processing in service performance of µ s quarterly, to be carried out during the first five days of each quarter. Article 39 [â € ¦] 1-the national comparticipaà the community rivers systems of financial incentives to support the productive sector is ensured by the State budget or the budgets of the entities that protect the respective areas, regardless of fearing your national or regional nature. 2-are also transferred to the Region Autonomous ³ µ s nomas the importance instances corresponding to the payment of free µ s due on their territory by ³ rivers and resulting from application of incentive systems created not national level. Article 40 [â € ¦] 1-For projects of common interest means those that are promoted by µ g/s of interest or national strategy and the susceptà still available

to produce positive economic effect mico ³ for the whole national economy, measured, inter alia, by its aftermath references in terms of the balance of payments or the creation of jobs, and, as well as those that have the effect of a decrease of the costs of insularity or relevà special instance in social and environmental areas, the development of new technologies , transport and µ s communication. 2 - …................................................................................................................ 3-The condition µ s state of financing concrete projects foreseen in the previous number are fixed by Ordinance, heard the Regional Government to which it relates and the monitoring Council of Poland Financial policies, which must respect the princà pio equality µ s Standalone Region ³ nomas. Artigo 49º
[…]

11 1 - …................................................................................................................ 2-The legislative assemblies of the Autonomous ³ µ s nomas Region may, in accordance with the law, reduce national rates of income taxes (IRS and IRC) and value added tax, up to a maximum of 30% and 35%, respectively, and excise duty, in accordance with the legislation in force. 3 - …................................................................................................................ 4 - …................................................................................................................ 5-The legislative assemblies of the Autonomous ³ µ s nomas Region may grant the µ majoraà es in the percentages and limits the burden dedutà ABLES is IRS collection pursuant to IRS CODE ³ say, regarding the costs of environmental equipment, with the next housing ³ pria and permanent, and with health, support to seniors and education. 6-The legislative assemblies of the Autonomous ³ µ s nomas Region can still, grant kept of µ is collection of IRS, defining its limits, for expenses incurred with the health, support to the elderly, education, deslocaà of µ s of plane in the territory by ³ national river for patients and possible date and for the students of the Region Autonomous ³ µ s nomas displaced in other islands or the mainland Portuguese.-7 (prior Nr 5). 8-The legislative assemblies can increase, even 30%, the limits of the tax relating to the cios benefà Patronage and creating of employment laid down by the Statute of Benefà cios. 9-(previous Nr 6). Artigo 51º
[…] 1 - …................................................................................................................ a) …........................................................................................................ b) …........................................................................................................ c) …........................................................................................................ 2 - …................................................................................................................ a) …........................................................................................................ b) …........................................................................................................

12 c) …........................................................................................................ 3 - …................................................................................................................ 4 - …................................................................................................................ 5-in the case of the Region Autonomous ³ µ s nomas opt for regionalizaà of tax services, there is no payment compensatà ³ River to the State. Artigo 55º
[…] 1 - …................................................................................................................ 2 - …................................................................................................................ 3-tax revenues belonging to Standalone ³ µ s nomas Region in accordance with the Constitution, the statutes Poland tico-administrative and of this law cannot be allocated to local authorities based on the Region Autonomous ³ µ s nomas, in the framework of the financial scheme ¢ established for those. Article 59° [â € ¦] 1-the provisions of this law: a) â € ¦........................................................................................................... b) â € ¦........................................................................................................... c) â € ¦...........................................................................................................) is not contrary to the provisions of the Constitution and the statutes of the Administrative Region-Poland µ s Autonomous ³ nomas. 2-(deleted). Article 61° [â € ¦] the Government of the Republic approves the actions needed is executing the provisions of article 6 Nr 15° in article 3 Nr 19°, at Nr 3 of article 40 and article 65°-(A) within 120 days after ³ s the publication of this law. Article 62° [â € ¦] 13 1-in the framework of the transfer from the State to the Autonomous Region of Madeira ³ noma of µ s assignment and competence laid down in this Constitution and in the law with respect to their tax revenues next ³ own as well as the power to perform all acts required is your personnel administration and management , the legal references made in legislation the national tax to the Minister of finance or the Director-General of taxes, reported to the holders of the corresponding à ³ the regional bodies. 2-until they are created and installed all the means needed to exercà heat power tax is conferred to µ s Standalone Region ³ nomas, the direction-General of taxes, through its departments and services and the services of the State continue to ensure the completion of the procedures in administrative matter necessary to exercà of the mentioned power , including the related is settlement and charging of taxes that make up recipe next ³ pria of µ s Standalone Region ³ nomas. Article 63° [â € ¦] 1-µ s Standalone ³ Regions should adopt perà nomas odo maximum two years after ³ s the date of entry into force of this law, the Official Plan of public Accounting and

respective sectoral accounts plans. 2-the Government of the Republic offers to the Region Autonomous ³ µ s nomas the µ s application computers integrated policies, as well as the technical support necessary for the fulfilment of the provisions of this article. Article 65° [â € ¦] this law is revised in the year 2015.» Article 2nd Addition is only Organic Law nº 1/2007, of 19 February are added to articles 4th-, 8°-A, article B, 8 22°-25℃-43°,-A,-A, 44 65°-65°-B and is only Organic Law nº 1/2007, of February 19 , with the following redacÃ: «Article 4th-14 Princà Pius of regional financial autonomy 1-the financial autonomy of Autonomous ³ µ s nomas Region is reflected in the existence of heritage ³ nio and finance own ³ themselves and reflected in the autonomy of assets, budget and Treasury amental. 2-the financial autonomy to guarantee to the bodies of ³ is Government own ³ prio of µ s Standalone Region ³ nomas the means required is prossecuà of its µ s assignment, as well as the availability of appropriate instruments is the promotion of the economic development and social ³ and the well-being and quality of life of the populace µ s, elimination of inequalities arising from the situation of insularity and remoteness and conducting of convergà th ³ mica economic power with the rest of the territory by national and river ³ the European Union. Article-No. Princà 8 Pius of territorial continuity the princà pio of territorial continuity is based on the need to correct structural inequalities arising from remoteness and insularity, and aims at the full consagraà of the citizenship rights of the populace µ s island, linking the State to your performance, in accordance with its constitutional obligations µ s. Article #-B Princà 8 pio of regionalizaà of the regionalizaà services of services and the transfer of powers are continuing in accordance with the Constitution and the law, and must always be accompanied by the corresponding financial resources to cope with their charges, in accordance with article 43°-the article article 22 to excise the game Constitutes revenue of each Autonomous Region ³ noma excise duty by exercà cio of game activity because the companies dealer rias in the respective circunscrià of µ s territorial. Article 25℃-wool quidas revenues from the exploitation of social gaming Is prescription of each Autonomous Region ³ noma a participation in results net wool of exploitation of social games operated by Holy House of Mercy mercy ³ of Lisbon, determined by the capitaà method.

15 Article 43°-the Regionalizaà of services 1-the financial means to meet the costs of the regionalized services are determined by the difference between revenue and expenditure arising from the transfer of competence, from the average of the last three years preceding the year in which the regionalizaà occurs. 2-the appropriations referred to in the previous number are adjusted annually in accordance with the criteria defined in paragraphs 3 and 4 n article 37º. 3-The transfers arising out of this article processing in service performance of µ s quarterly, to be carried out within 15 days of each quarter. Article 44°-the delays in transfers will be payable on late payments by the Central Administration, in the cases of delays in financial transfers from the State. Article 65°-the Hits of transfers the amounts due arising from application of the provisions of articles 5Â, Nr 6, 30° and 31° of the Law Nr 13/98, of 24 February, are delivered to the Region Autonomous ³ µ s nomas by celebration of a regularizaà agreement. Article 65°-B Afectaà of savings the only organic law nº 1/2007 The savings the State resulting from the application articles 37 and 38° organic law nº 1/2007 only, of 19 February, determined by reference to the amounts transferred in the year 2006, are earmarked for the financing of projects of common interest in the region.» Article 3rd revogatà ³ Standard ria are repealed articles 32°, 44° and 57° organic law nº 1/2007 only , 19 February.

4th Republicaà Article 16 of the Organic Law nº 1/2007 only, of February 19, is republished in annex, with µ s changes introduced by the present diploma, required renumeraà and other fix utility of µ s materials. Article 5° entry into force the present law shall enter into force on 1 January 2010. Approved in PlenÃ, session of the Legislative Assembly of Madeira, on 29 October 2009. The PRESIDENT of the LEGISLATIVE ASSEMBLY of MADEIRA, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Jose Miguel Olive Garden of mendonã§a ANNEX Republicaà 17 of the Organic Law nº 1/2007 single, February 19 finance law of µ s Standalone Region ³ nomas AS  TITLE I subject-matter, general principles princà and delicate rendering of accounts  HOOD CHAPTER I subject matter and princà general principles Article 1 Subject this law concerns the definition of means µ µ features in regions Standalone ³ nomas es of ores and wood steel for the lifetime achievement of financial autonomy enshrined in the Constitution and in the Statute-Poland. Article 2nd is ‚ scope for the purposes of the previous article, this law covers the matter relative to rias regional recipes, to power the prà ³ tax itself of µ s Standalone Region ³ nomas, adaptation of the national tax system and the relationships between financial µ µ s regions Autonomous ³ nomas and local authorities stationed in the Region Autonomous ³ µ s nomas. Article 3rd Princà whistles the financial autonomy of the Region Autonomous ³ µ s nomas develops respect for the following principles: princÃ) Princà Pius of legality; b Princà pio of financial autonomy); c) stability of the pio Princà trust financial µ; d) pio Princà budget amental stability; and Pius Princà national solidarity); f) pio Princà of territorial continuity; g) Princà pio of regionalizaà of services; h) Princà Pius of coordination;

18 i) pio Princà of transparency; j) Princà pio. Article 4th Princà Pius of legality to financial autonomy of Autonomous ³ µ s Region nomas performs within the framework of the Constitution, the statutes of the Administrative-Poland, of this law and other legislation. Article # Princà 5 Pius of regional financial autonomy 1-the financial autonomy of Autonomous ³ µ s nomas Region is reflected in

existence of own assets and finance and is reflected in the autonomy of assets, Treasury and budget. 2-financial autonomy aims to ensure the Government organs of the autonomous regions the means necessary for the pursuit of its mission, as well as the availability of appropriate instruments to promote economic and social development and the well-being and quality of life of the people, the Elimination of inequalities arising from the situation of island regions and outermost regions and the achievement of economic convergence with the rest of the country and with the European Union. Article 6 principle of stability of financial relations the regional financial autonomy grows in respect for the principle of stability of the financial relations between the State and the autonomous regions, which aims to ensure the Government organs of the autonomous regions the predictability of the means necessary for the pursuit of its mission. Article 7 principle of budgetary stability 1-regional financial autonomy develops within the framework of the principle of budgetary stability, which presupposes, in the medium term, a situation close to budget equilibrium. 2-both the State and the autonomous regions contribute recipro Cally among themselves for the achievement of its financial objectives, within the framework of the principle of stability of the respective budgets.

19 article 8 national solidarity principle 1-the principle of national solidarity to ensure the promotion of the economic and social development and the well-being and quality of life of the people, binds the State to bear the costs of inequality derived from insularity, in particular with regard to transport, communications, energy, education, culture, health, sports and social security, with a view to the Elimination of inequalities arising from the situation of island regions and outermost regions and the realization of economic and social convergence with the rest of the country and with the European Union. 2-the principle of national solidarity is reciprocal and covers the national whole and each of its Regions, and should ensure an adequate level of public and private activities without sacrificing desigualitários. 3-the principle of national solidarity is compatible with financial autonomy and with the obligation of the autonomous regions contribute to the balanced development of the country and to the achievement of the objectives of economic policy which the Portuguese State is bound by treaties or international agreements, in particular those arising out of common policies or growth coordinates , employment and stability and common monetary policy of the European Union. 4-the principle of national solidarity fits in every moment, the level of development of the regions. 5-the national solidarity with the autonomous regions is reflected in the State budget transfers provided for in articles 41 and 42. 6-solidarity binds the State to also with the autonomous regions in the situations referred to in articles 43 to 47. Article 9 principle of coordination the autonomous regions wield to your financial autonomy by coordinating their financial policies with those of the State in order to ensure: a) the balanced development of the whole national; b) budgetary objectives that Portugal has obliged, in particular within the European Union; c) the realization of the principle of budgetary stability, in order to avoid situations of inequality.

20 article 10 territorial continuity principle the principle of territorial continuity is based on the need to correct structural inequalities arising from remoteness and insularity, and aims at the full consecration of the citizenship rights of insular populations, linking, in particular, the State to your performance, in accordance with its constitutional obligations. Article 11 principle of regionalization of services the regionalization of services and the transfer of powers are continuing in accordance with the Constitution and the law, and must always be accompanied by the corresponding financial resources to cope with their charges, in accordance with article 48. Article 12 transparency Principle 1-the State and the autonomous regions provide each other the entire economic and financial information required to fully achieve their financial policies. 2-the information referred to in the preceding paragraph must be complete, clear and objective and be provided in a timely manner. Article 13 principle of financial autonomy control of autonomous regions is subject to administrative controls, and, in accordance with the political Constitution and the political-administrative Status of each of the autonomous regions. Article 14 monitoring of Council 1-financial policies To ensure coordination between the autonomous regions and the finances of the State, working with the Ministry of finance and public administration, the monitoring of Financial Policies, with the following competencies: a) monitor the implementation of this Act;

21 b) Analyze the regional fiscal policies and your coordination with national financial policy objectives, without prejudice to regional financial autonomy; c) Enjoy, in the financial plan, the participation of the autonomous regions in Community policies, in particular those relating to economic and Monetary Union; d) ensure compliance with the rights of participation of autonomous regions in the financial area provided for in the Constitution and in the Political-Administrative Statutes; and) analyze the financing needs and debt policy and your regional coordination with the objectives of the national financial policy, without prejudice to regional financial autonomy; f) monitor the development of community support mechanisms; g) Ensure the principle of consistency between the regional tax systems and the national tax system, promoting, through recommendations, coordination between tax authorities

relevant regional and national; h) Issue the reports stipulated in article 4 Nr 32°, the Nr 2 35° article and in article 3 Nr 44°; I) issue opinions at the request of the Government of the Republic or of regional governments. 2-the Council gathers ordinarily once a year, prior to the approval by the Council of Ministers of the draft law on the State budget, and remarkably by request duly motivated of the Minister of finance or of one of the regional governments. 3-the Council is chaired by a representative of the Ministry of finance and administration and a public representative of the Regional Government of the action ores and a representative of the Regional Government of Madeira. 4-the Council is advised by a technical Committee, constituà of one representative of each of its members, which is in particular, the evaluation, monitoring and appropriate wording of proposals for resolving any issues µ s resulting from the application of the law, the selection and valuation of projects of common interest the preparation of µ s meeting referred to the Nr 2, as well as the implementation of the measures taken under the same.

22 FRONT HOOD  TITLE II Services of Auditors Article 15° Procedure of dà © excessive 1-fices in the framework of the procedure â dà © excessive fices, until the end of the months of February and August, regional services Estatà "present an estimate of accounts financial and not give public life of µ s management regional public for the previous years and current in accordance with the methodology of the ESA 95 and the Manual of the Dà © fice and GIVE life approved by Eurostat. 2-estatà national statistics authorities shall validate the accounts submitted by regional services Estatà "until the end of the month following your presentation. 3-in the case of bills not be validated or be raised reservations to the estimates submitted by the regional authorities, estatà national statistics authorities shall present a report detailed River ³ fix utility of µ s made and their impact on the balance of accounts and in public life of µ s management regional public. Article 16th run Estimates the budget amental 1-Each Regional Government presents quarterly, the Ministry of finance and administration, an estimated public of executing the budget amental and give public life from Regional Government, including the services and autonomous funds ³ nomos, until end of the month following the quarter to which they relate in the format set by the Ministry of finance and administration the public. 2-not sending the quarterly information referred to in the previous number implies the retention of 10% of the duodà © top of budget transfers amentais the State. 3-the percentage referred to in the previous number increases to 20% from the first quarter. 4-the sums retained are transferred to the regions Autonomous ³ µ s nomas as soon as they are received the elements that were at the origin of these retention µ s.

23 SO  TITLE II regional recipes ‡ SECTION is ƒ I SUBSECà ‡ ƒ tax revenue is the wrapping General Article 17° µ concepts for lifetime achievement effects of the distribution of tax revenue between the State and the Region Autonomous ³ µ s nomas,: a)  «³» nacional River Territories is the territory by Portuguese River ³ as defined in article 5° of the Constitution; b)  «Circunscrià € o ' à © the territory by ³ River on the continent or region autonomous ³ noma, as the case may be; c) «region Autonomous ³ noma» is the territories corresponding to the river arquipà ³ © Lake of ores and steel arquipà © Lake of the wood. Article 18° obligation µ s 1 State-in accordance with the provisions of the Constitution and statutes of the Poland administrative regions-µ s Autonomous ³ nomas have right to delivery by the Government of the Republic of tax revenues relating to taxes that should belong to them, in accordance with the following articles, as well as other recipes that they assign the by law. 2-revenue collected in the Region Autonomous ³ µ s nomas by State services that are delivered directly to regional coffers must be applied in projects that improve the functionality and the functionality of these services. 3-delivery by the Government of the Republic to µ s Standalone Region ³ nomas tax revenues that they compete is 15° until the day of the month following that of your charging. 4-in case of not being could not determine with accuracy the portion of the tax revenue of any taxes relating to µ s Standalone Region ³ nomas, the amount provisionally transferred is equivalent to wool quida recipe in the month ³ 24 homolog of the year before multiplied by the rate of growth respective tax revenue envisaged in the State budget for the current year. 5-for the purposes of the calculation of tax revenues due to the Standalone ³ µ s nomas Region, these have no right to assignment of tax revenue not collected by virtue of benefà cios applicable in your territory by ³ River. 6-No prejuà zo to articles following, are adopted by legislative or regulatory provision, as well as through protocols to be concluded between the Government of the Republic and the regional Governments, the measures required is lifetime achievement of the provisions of this article. SUBSECà ‡ à ƒ II Taxes Article 19° personal income tax Is revenue from every region Autonomous ³ noma the personal income tax: a) Due for individuals considered fiscally resident in each region, regardless of the place where exerà § am its activity; (b)), the final chapter, on income paid or made available is of individuals considered fiscally not residing in any circunscrià of the territory by ³ Portuguese River, by natural or legal persons with residence, head office or the effective direction in each region or by establishing stable them situated that such income should be imputed; Article 20° corporate income tax is 1 recipe of each Autonomous Region ³ noma the corporate income tax: the) Due by legal persons or similar companies that have headquarters, the actual direction or stable establishment in a single region; b) Due by legal persons or similar companies that have headquarters

or the actual direction in ³ Portuguese River territories and have branches, delegation of µ s, agencies, offices, rivers ³ µ s installation or any form of permanent representation without jurà personality tip own ³ pria in more than one circunscriÃ, in accordance with the procedure referred to in nº 2 of this article;

25 c), the final chapter, by income generated in each circunscriÃ, with respect to legal persons or similar companies that have headquarters, the actual direction or establishing stable in ³ river national territories. 2-regarding the tax referred to in addition to nea b) of the previous number, revenues from each of circunscrià are determined by the proportion between the annual business volume of exercà cio CIO corresponding ³ à s µ s installation located in each Autonomous Region ³ volume and total annual noma business ³ exercà 's cios. 3-for the purposes of this article, annual business volume ³ cios value of µ s transmission of goods and services of µ s of services, with deletion of the value added tax. Article 21° obligation µ s ³ accessories rias of income taxes entities that proceed to µ s set at the source to residents or non-residents, with or without establishing stable, should proceed to their discrimination by circunscriÃ, in accordance with the rules of the imputaà defined in accordance with the preceding articles. Article 22° value added tax 1-each recipe Is circunscrià the value added tax charged for the application of the suspensive arrangement, in accordance with the rules in force for the transacà of µ s intracomunitÃ, the µ s operation carried out with the remaining territory by ³ National River to import µ s and s µ s acquisition intracomunità various , and µ s operation on them, according to the criteria set out in paragraphs 2 and 3 n of article 1 of Decree-Law nº 347/85, of 23 August. 2-can in no case be adopted a way of calculation that results in a lower amount of revenue than received by the regime of capitaÃ. 3-the Minister of finance, ears the regional Governments, regulating by Ordinance the way of assigning the Region Autonomous ³ µ s nomas of their recipes. Article 23° excise duties Constitute revenue from each circunscrià of the excise duty levied on tax issues to be products that are released for consumption.

26 Article 24° stamp duty is 1 recipe of each Autonomous Region ³ noma the stamp duty payable by taxable persons referred to in article 1 Nr 2° ³ code say stamp tax: a) have headquarters, the effective direction, establishing stable or domicà lio µ s Standalone Region in fiscal ³ nomas; b) have headquarters or the effective direction in national river and ³ territories possess branches, delegation of µ s, agencies, offices, rivers ³ µ s installation or any form of permanent representation without jurà personality tip own ³ pria in µ s ³ nomas Autonomic Region. 2-In µ s situation referred to in the previous number, the revenues of each Autonomous Region ³ noma are determined, with the necessary adaptation µ s, in accordance with the rules of territoriality laid down in nº s 1 and 2 of article 4th of ³ the stamp duty in respect of several tax facts that occurred in these Regions µ, and should proceed to taxpayers discrimination in the respective tax guides. 3-In µ s is transmission free recipe of µ s Standalone ³ nomas Region the value of stamp tax: a) That, in the succession by µ death, would be due for each recepient with lio domicà in µ s Standalone Region fiscal ³ nomas, when the taxpayer is the inheritance, represented by the head-of-couple in accordance in nea) nº 2 of article 2nd ³ code the stamp tax; b) Due in µ s when the transmission free donatÃ, legatà or usucapiente have domicà lio µ s Autonomic Region in fiscal ³ nomas. 4-is also revenue from each Autonomous Region ³ noma, the amount derived from the stamp duty due on the multiple betting your sports, determined in accordance with the scheme of the capitaÃ. Article 25℃° Taxes extraordinary rivers 1-taxes extraordinary rivers settled as additional or on the matter colectà not or the collection of other taxes constitute circunscrià recipe to which have been affected the main tax levied on.

27 2-taxes extraordinary standalone ³ nomos rivers are proportionally allocated to each of the circunscrià according to the location of the goods, the celebration of the contract or the situation of the assets secured by way of any obligation the main or accessory ³ laugh about that concern. 3-taxes extraordinary rivers can, according to the degree that the create, be allocated exclusively to one or more circunscrià of µ s if the exceptional situation that the legitimate occur or check only this or these circunscrià of µ s. Article 26° excise the game Constitutes revenue of each Autonomous Region ³ noma excise duty by exercà cio of game activity, because the companies dealer rias in the respective circunscrià of µ s territorial. ‡ SECTION is the ƒ II other income Article 27° Interest Constitutes revenue of each circunscrià the amount charged on the interest and interest compensatà ³ rivers, wool or of interest indemnizatà ³ rivers about taxes that constitute revenue own ³ own. Article 28° fines and fines 1-fines and fines are circunscrià recipe in that if you have checked the action or default that constitutes the infringement. 2-When the infringement if practice in successive or repeated acts, or by a susceptà Act of ³ extends in time, the criminal or non-criminal fines are affected is circunscrià in whose area if you have practiced the last act or has ceased consumaÃ. Article 29 º fees and public prices Constitutes revenue of each regional region Autonomous ³ noma, the product of the rates, fees and prices payable for the services of regional services, by acts of 28 removal of jurà limits doctors to particular activities of the jurisdiction of the à ³ body Regionals and the use of domestic goods regional public domain. 30° article liquid Recipes of the exploitation of social gaming Is prescription of each Autonomous Region ³ noma a participation in

wool net results of exploitation of social games operated by Holy House of Mercy mercy ³ of Lisbon, determined by the method of capitaÃ. ‡ SECTION is ƒ the III GIVE regional public life 31° Princà general principles Article recourse to regional public indebtedness shall be guided by principles of princà accuracy and efficiency, aims to ensure the disponibilizaà of the funding required for each exercà heat budget amental and pursues the following objectives :) Minimizaà of direct and indirect costs on a long-term basis; b) ensuring a balanced distribution of costs by several annual budgets; c) prevention of excessive concentration of the µ amortizaà es; d) does not display excessive risks. Article 32° loans public-1 µ s Regions Autonomous ³ nomas may, in accordance with their respective Statutes Poland Administrative-and this law, contract gives public life founded and floating. 2-the contracà of loans without legal tender currency in Portugal is made in accordance with the statutes of the Administrative-Poland, depends on building via the authorization of the Assembly of the Republic and takes into consideration the need to avoid distorà of µ s in foreign and public life does not cause negative reflexes in the rating of the Republic. 3-The loans contract by Region ³ µ s Standalone nomas denominated in currency without legal tender in Portugal cannot exceed 10% of the debit direct life every region Autonomous ³ noma.

29 4-duly justified and with the prior opinion of the Board of monitoring of Financial policies, Poland percentage referred to in the previous number may be exceeded, by authorization of the Assembly of the Republic on the proposal of the Government. Article 33° GIVE life founded the contracà of give life founded lacks authorization of their respective legislative assemblies, pursuant to the Statutes of the Administrative-Poland Region ³ µ s Standalone nomas, and is intended exclusively to finance investments or replace and amortize loans previously contraction of, obeying the limits laid down in accordance with the provisions of this law. Article 34° Dà floating life to cope with cash-flow needs, µ s regions Autonomous ³ nomas may issue dollar floating life whose cumulative amount of µ s "alive in each moment must not exceed 35% of the current revenues collected in previous cio exercÃ. Article 35° limits on indebtedness-1 µ s Regions Autonomous ³ nomas may each year contract gives life founded in compliance with the maximum limit laid down in nº 4 of this article and does not match a wool or additional indebtedness in proportion than the State that year, calculated, for each region, of harmony of princà pio of capitaÃ. 2-in the case of µ s Standalone ³ regions requires increased nomas wool or higher-than-expected debt the Nr 1, must obtain the opinion of the Board of favorà monitoring of Financial practices and Controversial approval of the Assembly of the Republic, to be granted in the framework of the law of the budget. 3-for the purposes of consideration of the debt limits are excepcionados wool net debt increases by µ g/s linked is executing of projects co-financed by Community funds. 4-in the setting of the limits mentioned in the previous answer numbers that, as a result of the additional debt or increase the credit is region, the service of Dan total life, including the amortizaà of µ s and annual interest, do not exceed, in any case, 25% of the current revenues of the previous year, with the exception of transfers and comparticipaà of µ s from the State for each region.

30 5-for the purposes of the previous number, do not consider the service gives the amount of life amortizaà µ s is extraordinary. 6-in the case of loans whose amortizaà of the concentrate in a single year, for the purposes of the previous number, is anualizaà of its value. 7-debt balances or wool of a given year may be used in one of the three subsequent years. Article 36° Penalty for violation of the limits on indebtedness-1 violation of the limits of indebtedness for a Standalone region ³ noma leads to a reduction in the transfers of the State that it is payable in the subsequent year of value equal to the excess of indebtedness in relation to the maximum limit determined in accordance with the previous article. 2-to the reduction referred to in the previous number is proportional-mind in service performance of µ s to be transferred quarterly. 3-the reduction anticipated in the nº 1 will be used on amortization of give life region ³ noma its Standalone or, if such is not exequÃ, in increasing values © heater power intended for the financing of projects of common interest in this region. Article 37º Support of the Institute of management of the Treasury and public credit , I. P. Standalone ³ µ s regions may use nomas to the support of the Institute for the management of the Treasury and public credit, I. P., both for the Organization of issuing µ s dà regional public life, both for the monitoring of your management, to reduce cost and risk and to coordinate operations µ s dà regional public life with the give direct public life of the State. 38° tax treatment article of the tenth regional public life to give regional public life enjoys the same tax treatment that gives public life of the State. Article 39° State guarantee The loans issued by Standalone ³ µ s nomas Region can benefit from personal guarantee of the State, in accordance with its law.

31 Article 40 paragraph Assunà of commitments of µ s Standalone ³ nomas Region by the State the State can assume responsibility for obligations of the µ µ s Region Autonomous ³ nomas es and assume the commitments arising from these µ s obligation, in accordance with the law. ‡ is the ƒ SECTION IV State transfers Article 41° budget transfers amentais 1-pio of princà of solidarity enshrined in the Constitution, in Statutes-administrative and Poland in this law, the law of the State budget each year includes amounts to be transferred to each of the Standalone ³ µ s nomas Region. 2-the annual amount of funds to be entered in the budget of the State for the year t equals the amounts entered in the budget of the State for the year t-1, updated according to the update rate set under the following numbers. 3-the update rate is equal variation rate is, in year t-2,

current expense of the State, excluding the transfer of State for social security and the contribution of the State to the Caixa Geral de Aposentaà of µ s, according to the General Government account. 4-If the rate resulting from the previous less than Nr is rate of wage update the function public that same year applies this last rate. 5-in the case of the variation rate defined in the previous number exceed the estimate by the National Institute of Arts Estatà of the variation rate of the year t-2, the GDP at current market prices, the rate of updating referred to in nº 2 will an estimate by the National Institute of Arts Estatà the rate of variation of the in the year t-2, the GDP at current market prices. 6-in the year of entry into force of this Act, the amount of the appropriations to be entered in the budget of the State for the year t equals 355,800,000 euros. 7-the distribution of this amount by µ s ³ nomas Standalone Region, taking account of their structural features, is made according to the following formula: 32 ³ ï fan ƒ° ï ƒ° ï ƒ» ï ï ï ƒ ƒ ƒ ¹ th TH ƒ ' ï ï ï ï ƒ © € «€ «€ «ï € ï «ï € ï € ï € ï .5 € ï ï € ï € ï € ï € € 4 , 4, 2, 2, 2, 2, 2, 2, tR, 05, 0125, 0 14 14 05.0 65 65 05, 00, 725 tRA tR RA R tRA tRA tRA tRA tR tR tR EF EF UI UI P P P P P P TT Being: tR, T-transfer to the Autonomous Region in year t ³ noma; TRA, T-transferring to the Standalone ³ µ s Region in year t nomas, calculated in accordance with the provisions of this article 2 Nr; 2, ï € tRP-population of the Autonomous Region in year t ³ noma-2 according to recent data published by the INE is costing date; 2, ï € tRAP-sum of the population of the nomas ³ µ s Autonomic Region in year t-2; ï € 2.65 tRP-population of the Autonomous Region in year t ³ noma-2 with 65 years of age or older according to recent data published by the INE is costing date; 2.65 ï € tRAP-sum of the population of the nomas ³ Autonomous Region with 65 years of age or older in the year t-2; 2.14 ï € tRP-population of the Autonomous Region in year t ³ noma-2 with 14 or so years of age, according to recent data published by the INE is costing date; 2.14 ï € tRAP-sum of the population of the nomas ³ µ s Autonomic Region in year t-1 with 14 or fewer years old; RIU = RA R RA R DL DL ilhasn ilhasn ° ° 3, 07, 0 ï ‚ ï € ï ‚ ' ´ ´ RAIU-sum of the indexes of remoteness; RDL-distance between the capital of each Autonomous Region ³ noma and the capital of Paà s; RADL-sum of the distances between the capital of each of the Standalone ³ µ s nomas Region and the capital of Paà s; RilhasnÂ-number of Islands with population resident in the Autonomous ³ noma; RAilhasnÂ-total number of Islands with population resident in Standalone ³ µ s nomas Region;

ï ‚ ï € 33 EFR, € 4-FROG tï beginning between tax revenues of the noma, wool quidas ³ Standalone the corrective effect of VAT arising from the nº 2 of article 22° of this degree, and any extraordinary tax rivers hits of previous years, and gross domestic product at market prices, current prices, in the year t-4; ï ‚ ï € EFRA, € tï 4 = sum of indicators of fiscal effort. 8-from the year t + 1, the apportionment structure resulting from the application of the criteria laid down in nº 7, cannot, under any circumstances, result in an amount for each Autonomous Region ³ noma less than the amount received in the previous year, updated in accordance with the provisions of this article 2 Nr, doing the necessary clearing of µ s by deduction of the amounts of the region Autonomous ³ noma that has a growth higher than that defined in even Nr 2. 9-The transfers from the State budget process in service performance of µ s quarterly, to be carried out during the first five days of each quarter. Article 42° Cohesiveness Fund for the regions ultraperifà © µ s 1-rich the Cohesiveness of the Fund is intended to support exclusively investment programmes and projects contained in the annual investment plans of the Region Autonomous ³ µ s nomas, having regard to the provisions on in nea g) article 9° and beyond nea j) of Nr 1 of article 227 of the Constitution , and aims to ensure the economic convergà ³ mica with the remaining territory by ³ national river. 2-the Cohesiveness of the Fund has µ and in each year of funds from the State budget, to be transferred to the Regional budgets, to finance programmes and projects of investment, previously identified, which meet the requirements of the previous number and is equal to 35% of budget transfers amentais to every region Autonomous ³ noma defined under article 41°. 3-The transfers provided for in this article processing in service performance of µ s quarterly, to be carried out during the first five days of each quarter Article 43° Comparticipaà of incentive systems national 1-comparticipaà of the national community rivers systems of financial incentives to support the productive sector is ensured by the State budget or the budgets of the entities to protect their areas regardless of your national or regional nature. 2-are also transferred to the Region Autonomous ³ µ s nomas the importance n-newsgroups relating to payment of free µ s due on their territory by ³ 34 rivers and resulting from application of incentive systems created not national level. Article 44° projects of common interest 1-For projects of common interest means those that are promoted by µ g/s of interest or national strategy and susceptà to produce economic effect ³ for positive Tamarin national economy, measured, inter alia, by its aftermath references in terms of the balance of payments or the creation of jobs and, as well as those that have the effect of a decrease of the costs of insularity or relevà special instance in social and environmental areas, the development of new technologies, transport and the µ s communication. 2-the rank of a project as being of common interest depends on favorà decision of the Government of the Republic and the Regional Government. 3-The condition µ s state of financing concrete projects foreseen in the previous number are fixed by Ordinance, heard the Regional Government to which it relates and the monitoring Council of Poland Financial policies, which must respect the princà pio equality between regions µ s ³ nomas 45° Article Standalone special cases Constitute extraordinary transfers from the State budget

that result from established articles 46° and 47°, as well as any intended transfers is lifetime achievement of territorial continuity. Article 46° financial Protocols In exceptional cases, the State and the Region Autonomous ³ µ s nomas may award financial protocols with µ s obligation newly procas not provided for in this law, but in accordance with its general principles princÃ. Article 47° Support extraordinary 1-national solidarity binds the State to support the Region Autonomous ³ µ s nomas in µ s unforeseen situations resulting from natural strofes catalog and for which these do not have the financial resources, aimed at, inter alia, 35 µ s action of rebuilding and recovery of infrastructure and economic activities and social ³ micas and support the respective µ s population affected. 2-national solidarity is reflected even in the obligation of the State to restore the previous situation is practice of environmental damage, by him or by other States caused in µ s Standalone Region ³ nomas, arising from the exercà heat of activities, in particular by virtue of international agreements or treaties, or to provide the financial resources required is repairing the damage. Article 48° Regionalizaà of services 1-the financial means to meet the costs of the regionalized services are determined by the difference between revenue and expenditure arising from the transfer of competence, from the average of the last three years preceding the year in which the regionalizaà occurs. 2-the appropriations referred to in the previous number are adjusted annually in accordance with the criteria defined in paragraphs 3 and 4 n article 41°. 3-The transfers arising out of this article processing in service performance of µ s quarterly, to be carried out within 15 days of each quarter. Article 49° delays in transfers will be payable on late payments by the Central Administration, in the cases of delays in financial transfers from the State. Tà TULO  III Power the prà ³ tax itself and adaptation of the national tax system is the ƒ ‡ SECTION I General Framework Article 50° general principles Princà The competence of various tax preferences is ³ body Regionals constitutional limits are observed and Bylaw and the following principles: princÃ) the princà pio of the coerà between the national tax system and regional tax systems;

36 b) pio princà of legality under the Constitution; c) pio princà equality µ s Standalone ³ nomas Region; d) pio princà of national solidarity, in accordance with article 8° of this law; and the princà pio flexibility), to whom the regional tax systems must adapt to the regional specificities, wants and can create taxes in force only in the Standalone ³ µ s nomas Region, either adapting the taxes of the national framework at regional specificities; f) the princà pio of suficiÃ, in the sense that the charging the tax various regional princà pio, visarà to cover public expenditure; g) the princà peep the functional efficiency of the regional tax systems, in the sense that the organisation of the regional tax systems should encourage investment in the Region Autonomous ³ µ s nomas and ensure the economic development and social ³. Article 51° competency are tax 1-substances the body ³ Regionals have competency tax transfers various regulatory and administrative nature, to exercise in accordance with the following numbers. 2-the regional legislative jurisdiction in matter, is exercised by the legislative assemblies of the Autonomous ³ µ s nomas Region, by Legislative Decree, and comprises the following powers: a) the power to create and regulate taxes in effect only in Standalone ³ µ s Region nomas respective, setting its incidence, the rate, the settlement, charging, the benefà tax and cios the taxpayer guarantees pursuant to this law; b) the power to adjust taxes of à ¢ national framework at regional specificities, in matter of incidence, benefà tax rate, cios and taxpayer guarantees, within the limits laid down in the law and in accordance with the following articles. 3-The competency standards and Administrative Sciences referred to previous numbers are carried out in accordance with the µ s section II and III of this title III, without technical prejuà zo of coordination between the national and regional competent tax authorities provided for in article 14°.

‡ SECTION 37 is the ƒ II competence legislative and regulatory substances are 52° Article tax Taxes in force only in the Standalone ³ µ s Region 1-nomas The legislative assemblies of the Autonomous ³ µ s nomas Region, by regional legislative decree, may raise taxes in force only in the respective region Autonomous ³ noma, provided that they observe the princà principles enshrined in this law, does not relate to the subject matter of the expected incidence for any of the taxes of à ¢ national framework still, to exempt or not subject, or, it is not included, can be susceptà not to integrate this incidence, and your application does not result in barriers is Exchange of goods and services between the different points of the territory by ³ national river. 2-The taxes referred to in the previous number shall expire if they are subsequently created other similar à ¢ national framework. 3-the jurisdiction referred to in nº 1 applies, inter alia, the power to create and regulate contribution µ s current improvement only in Standalone ³ µ s Region nomas, for tax increases in value of Imam ³ available due to construction and public investment and regional, as well as create and regulate other contribution µ s to compensate for the larger special expenses arising from regional private activities stressful or perpetrators of public goods or regional environment. Article 53° taxes Additional Legislative Assemblies have jurisdiction to launch additional air, up to a limit of 10% of the collection of the taxes in force in the Region Autonomous ³ µ s nomas. Article 54° Adaptation of the national tax system to the regional specificities 1-Without prejuà zo the provisions in legislation to apply only in the national fiscal µ s Standalone Region ³ nomas, the adaptation of the national tax system to the regional specificities observes the provisions of this law and its legislation. 2-The legislative assemblies of the Autonomous ³ µ s nomas Region may, in accordance with the law, reduce national rates of income taxes

(IRS and IRC) and value added tax, up to a maximum of 30% and 35%, respectively, and excise duty, in accordance with the legislation in force.

38 3-The legislative assemblies can also determine the application in Standalone ³ µ s nomas Region of reduced rates of CORPORATION TAX defined in national legislation, in accordance with the terms and condition µ s that are established by regional legislative decree. 4-The legislative assemblies of the Autonomous ³ µ s nomas Region may grant kept of µ is tax on business profits, and agrà industrial glues reinvested by taxable persons. 5-The legislative assemblies of the Autonomous ³ µ s nomas Region may grant the µ majoraà es in the percentages and limits the burden dedutà ABLES is IRS collection pursuant to IRS CODE ³ say, regarding the costs of environmental equipment, with the next housing ³ pria and permanent, and with health, support to seniors and education. 6-The legislative assemblies of the Autonomous ³ µ s nomas Region can still, grant kept of µ is collection of IRS, defining its limits, for expenses incurred with the health, support to the elderly, education, deslocaà of µ s of plane in the territory by ³ national river for patients and possible date and for the students of the Region Autonomous ³ µ s nomas displaced in other islands or the mainland Portuguese. 7-The legislative assemblies of the Autonomous ³ µ s nomas Region may authorize the regional Governments to grant temporary tax cios benefà rivers and conditioned , on taxes of à ¢ national and regional framework, contractual arrangements, applicable to projects of significant investments, in accordance with article 39 of the Statute of the Benefà cios and legislation supplement in force, with the necessary adaptation µ s. 8-The legislative assemblies can increase, even 30%, the limits of the tax relating to the cios benefà Patronage and creating of employment laid down by the Statute of Benefà cios. 9-the jurà regime of International Business Centre dico ³ cios of Madeira and Santa Maria free zone shall be governed by the provisions of the staff regulations of Benefà cios and Tax legislation. Article 55° competence regulatory substances the body of ³ µ s Standalone ³ nomas Region have jurisdiction to regulate the tax matter rias subject of regional legislative jurisdiction.

‡ SECTION 39 is ƒ the III regional administrative sciences competence Article 56° competence administrative regional 1-substances The substances regional administrative competence in matter of taxation, the exercise by Governments and µ s regional administration respective, include: a) the ability of the Region Autonomous ³ µ s nomas be subject tax assets in them charged or à ¢ scope of regional à ¢ national framework pursuant to Nr 2; (b)) the right is delivery by the State tax revenues that should belong to them, in accordance with the provisions of articles 17° et seq.; c) the power to fix the amount of the fees, charges and prices payable for the services of regional services, though, by granting regional leased licenses, building permit and other removal µ s jurà limits doctors to regional activities of individuals and the use of domestic goods regional public domain. 2-the ability of the Region Autonomous ³ µ s nomas be subject tax charged therein assets comprises: a) the power to Regional governments create tax services responsible for posting, settlement and charging of taxes of à ¢ scope; b) the power to regulate the matter holidays referred to in previous nea without prejuà zo of taxpayer guarantees, à ¢ national scope; c) the power of the Region Autonomous ³ µ s nomas using state tax services based in the Region Autonomous ³ µ s nomas, upon payment of a clearing, agreed between the State and the Region Autonomous ³ µ s nomas, concerning the service by that provided in your legal representation. 3-in the case of the State does not collect the clearing referred to in nea c) of the previous number, this should be counted as State transfer to µ s regions Autonomous ³ nomas. 4-national taxes which constitute regional recipes and regional taxes and fees should be identified as such to taxpayers in tax forms and print, whenever I could, even if they are charged by the tax administration of the State.

40 5-in the case of µ s Standalone Region ³ nomas opt for regionalizaà of tax services, there is no payment compensatà ³ River to the State. Article 57° competency for the grant of tax incentives and benefà 1-In matter of benefà and tax incentives, whatever your nature and purpose, the interest especà stay and exclusive to a single Autonomous Region ³ noma, the competence of the general law assign preferences to the Minister of finance are exercised with respect for the laws and princà general principles in force and in the framework of the princà ¢ Pius of equal , by a member of the Regional Government responsible for the area of finance. 2-The benefà or tax incentives of interest or à ¢ scope of interest or national especà I'm more of a circunscrià are the jurisdiction of the Minister of finance, listen to their regional governments. Article 58° competence of the fiscalizaà 1-fiscalizaà and the practice of the tax acts are hence resulting from taxable persons carrying out business in more than one circunscriÃ, as well as taxpayers whose jurisdiction for inspection of your be assign to the central services of the tax inspection, , the national tax authorities. 2-Fit the national tax authorities still the same competency instances where, in matter of benefà tax interest cios a Standalone region ³ noma or other special tax regimes, the absence of their assumptions or your application is susceptà not affect tax revenues of other circunscriÃ. 3-the provisions of the previous numbers does not affect the possibility of national tax and regional authorities establish by order or by set Protocol, cooperation mechanisms to the exercà heat of those competency. Article 59° conflicts over the location of charging The tax disputes is jurisdiction to decide on the location of charging taxes à ¢ scope of interest to national Region Autonomous ³ µ s nomas are

resolved by agreement between the national and regional competent tax authorities and, in your absence, by decision of the Supreme Administrative Court.

41  TITLE IV of the TECHNICAL relationship between financial µ µ s regions Autonomous ³ nomas and local authorities Article 60th finance 1-The local authorities finance local authorities located in the Region Autonomous ³ µ s nomas and those of Standalone ³ µ s nomas Region are independent. 2-the provisions of this Act do not affect the financial regime of local authorities. 3-tax revenues belonging to Standalone ³ µ s nomas Region in accordance with the Constitution, the statutes Poland tico-administrative and of this law, cannot be allocated to local authorities based on the Region Autonomous ³ µ s nomas, in the framework of the financial scheme ¢ established for those. Article 61° financial support to local authorities any form of regional financial support to local authorities for beyond the already provided for in the law should be aimed at the reinforcement of the capacity of local government investment. Tà TULO V  wrapping final and transient ³ µ rias 62° Article this law, Framework Law on matter, constitutes the framework law referred to in the Constitution and the statutes of the Administrative-Poland Region ³ µ s Standalone nomas. Article 63° Clan safeguard clauses the provisions of this law: a) does not require compliance with obligations previously assumed by the State µ s in relation to µ s Standalone Region ³ nomas and these in relation to the State; b) does not affect the obligation assumed or assume µ s in à ¢ scope of treaties and international agreements concluded by the Portuguese State;

42 c) does not affect the constitutional prerogatives and various Bylaw of µ s ³ Autonomic Region, namely the nomas regarding rights of participation in the trading of µ treaties or international agreements; d) does not contravene the provisions of the Constitution and the statutes of the Administrative Region-Poland µ s Autonomous ³ nomas. Article 64° tax on succession and donation µ µ s not regardless of certificate revocation of the Law Nr 13/98, of 24 February, continues to apply article 15° of the law in respect of the tax on the succession and donation µ µ s due for any free forwarding the fact the tax took place until certificate revocation is the Municipal tax CODE say ³ of conveyance tax and Succession duty µ s and donation µ, and whose process of settlement of the tax is pending is date of entry into force of this law. Article 65° additional standards for the Government of the Republic approves the actions needed is executing the provisions of article 6 Nr 18°, in article 3 Nr 22° in article 3 Nr 44° and 70° within 120 days after ³ s the publication of this law. Article 66° transfer of µ s assignment and competency for the Standalone ³ µ s Region 1-nomas In à ¢ scope of transfer from the State to the Autonomous Region of Madeira ³ noma of µ s assignment and competence laid down in this Constitution and in the law with respect to their tax revenues next ³ own as well as the power to perform all acts required is your personnel administration and management , the legal references made in legislation the national tax to the Minister of finance or the Director-General of taxes, reported to the holders of the corresponding à ³ the regional bodies. 2-until they are created and installed all the means needed to exercà heat power tax is conferred to µ s Standalone Region ³ nomas, the direction-General of taxes, through its departments and services and the services of the State continue to ensure the completion of the procedures in administrative matter necessary to exercà of the mentioned power , including the related is settlement and charging of taxes that make up recipe next ³ pria of µ s Standalone Region ³ nomas.

43 Article 67° Adopting the Official Plan of public Accounting 1-µ s Standalone ³ Regions should adopt perà nomas odo maximum two years after ³ s the date of entry into force of this law, the Official Plan of public Accounting and respective sectoral accounts plans. 2-the Government of the Republic offers to the Region Autonomous ³ µ s nomas the µ s application computers integrated policies, as well as the technical support necessary for the fulfilment of the provisions of this article. 68° ³ revogatà Standard article is ‰ revoked the Law Nr 13/98, of 24 February, and respective changes µ s, without prejuà zo article 64°. Article 69° review this law is revised in the year 2015. Article 70° hit transfers the amounts due arising from application of the provisions of articles 5Â, Nr 6, 30° and 31° of the Law Nr 13/98, of 24 February, are delivered to the Region Autonomous ³ µ s nomas by celebration of a regularizaà agreement. Article 71° Afectaà of savings the only organic law nº 1/2007 The savings the State resulting from the application of paragraph artigos37 and 38° organic law nº 1/2007 only, of 19 February, determined by reference to the amounts transferred in the year 2006, are earmarked for the financing of projects of common interest in the respective region. Article 72° entry into force this law shall enter into force on 1 January 2010.