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Proposal for Law No 11 /XII

Exhibition of Motives

The legal regime of the local business sector was approved by the Act No. 53-F/2006, 29 of

December, to which it was amended by the Leis n. ºs 67-A/2007 of December 31, and

64-A/2008, of December 31.

By the Resolution of the Council of Ministers No. 64/2010, published in the Journal of the Republic , 1. th

series, paragraph 168, of August 30, the Government has decided to promote the drafting of the White Paper

of the Local Business Sector with the aim of making the diagnosis and characterization

of this part of the business public sector. In accordance with the preamble to the said

resolution, the results of this exercise will serve as a basis for an evaluation of the legal framework

existing and its suitability for the sustainability of the local business sector, at the same

time that will allow to identify prospects for future development of this sector. By

your shift, the point g) of paragraph 2 expressly states that this study should include the

presentation of recommendations or proposals, specifically legislative.

Despite the designated study of "White Paper of Local Business Sector" not if

find still completed, the commitments made by the Government of Portugal with the

European Union and the International Monetary Fund in the framework of the Assistance Program

Financial require the adoption of immediate measures relating to the local business sector, the

which imply the amendment of the current legal framework, without prejudice to an eventual revision

global from that legal framework that comes to take place at a later time and take in line of

account, in particular, of the recommendations or proposals set out in the White Paper.

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In implementation of the said commitments, the present proposed law essentially targets the

amendment of the scheme for the establishment of municipal, intermunicipal and metropolitan enterprises, the

strengthening the monitoring powers of the central administration on the business sector

site and the suspension of the possibility of creation of new companies until it is completed

evaluation of the operations and financial situation of this part of the business public sector.

Take advantage of, yet, to clarify the subjective scope of the local business sector,

covering societies with respect to which municipal, inter-municipal and local companies

metropolitans may exercise, directly or indirectly, dominant influence.

It was heard from the National Association of Portuguese Municipalities.

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following proposal for a law:

Article 1.

Subject

The present diploma establishes imperative rules of transparency and information in the

operation of the local business sector and suspending the creation of new businesses

municipal, intermunicipal and metropolitan areas, as well as the acquisition of shareholdings

social for these.

Article 2.

Amendment to Law No. 53-F/2006 of December 29

Articles 2, 3, 8, 33, 33 and 47 of Law No 53-F/2006 of December 29, amended

by the Laws n. ºs 67-A/2007, of December 31, and 64-A/2008, of December 31, pass

to be replaced by the following:

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" Article 2.

[...]

1-[...].

2-For the purposes of the provisions of Article 6 (1) of the Decree Law No 558/99,

of September 17, as amended by Decree-Law No. 300/2007, of 23 of

August, by Law No. 64-A/2008, of December 31, and by the Law

n 55-A/2010, of December 31, the holdings held, direct or

indirectly, by municipalities, associations of municipalities and areas

metropolitans of Lisbon and Porto are considered to be aggregated

as a single relative share.

Article 3.

[...]

1-[...].

2-For the purposes of the preceding paragraph, municipal enterprises shall be considered,

inter-municipal and metropolitan the societies in which these companies

can exert, in a direct or indirect way, a dominant influence

under the terms of the previous number.

3-[ Previous Article No 2 ].

Article 8.

[...]

1-A creation of the companies, as well as the decision to acquire any

social participations, competes:

a) [...];

b) [...];

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c) [...].

2-A creation of the companies or the decision to acquire any

social participations is compulsorily communicated to the Inspectorate-General of

Finance and the Directorate General of Local Authorities, as well as the entity

sector regulator, when it exists.

3-[...].

4-[...].

5-A The conservatory of the competent register shall, officiously, at the expense of the

company, communicate the constitution and the statutes, as well as the respective

amendments, to the Public Prosecutor's Office and to the Directorate General of Local Authorities

and ensure the respective publication pursuant to the provisions of the Code of

Commercial Societies.

6-[...].

7-On the Autarctic Portal is a list, permanently updated, of

all entities in the local business sector and social shareholdings

by these detainees.

Article 27.

[...]

1-Without prejudice to the provisions of the commercial law as to the provision of

information to holders of social shareholdings, they owe the companies

to provide the following elements to the city hall, to the governing board

of the association of municipalities or the metropolitan joint, as the case may be,

with a view to their monitoring and control:

a) Projects of the annual and multi-annual activity plans;

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b) Projects of annual budgets, including estimation of operations

financial with the State and local authorities;

c) Annual and multi-annual investment plans and their sources of

funding;

d) Annual reporting documents;

e) Quarterly budget implementation reports;

f) Any other information and documents requested for the

monitoring of the situation of the company and its activity, with

seen, specifically, to ensure the good management of public funds and

the evolution of its economic-financial situation.

2-The municipalities provide to the Directorate General of Local Authorities, in the

terms and with the periodicity defined by this, institutional information

and economic-financial relative to municipal business entities and the

commercial companies in which they detain, directly or indirectly, any

social participations.

3-The municipalities also provide the Directorate General of Municipalities

Places, in the terms and with the periodicity defined by this, information

institutional and economic-financial relative to business entities

created by the associations of municipalities and metropolitan areas of Lisbon and

of the Port to which they belong, as well as relating to commercial companies

in which such associations of municipalities and metropolitan areas detain,

directly or indirectly, social participations.

4-In the event of non-compliance with the information duties provided for in the

n. ºs 2 and 3, as well as of the respective deadlines, are immediate and

automatically withheld 20% from the twelfth of the current transfers

of the FGM, while it lasting for the default situation.

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5-Companies are obliged to make available to municipalities in a timely manner

the information necessary for the fulfilment of the information duties, under

penalty of immediate dissolution of the respective governing bodies and of

the holders of these if they constitute themselves in the obligation to indemnify the

municipalities by the values retained in the terms of the previous number.

6-A Directorate-General for Local Authorities communicates to any entities

of the Ministry of Finance that will request you for the information that you are

provided in the terms of this article.

Article 33.

[...]

1-[...].

2-[...].

3-[...].

4-[...].

5-A The conservatory of the competent register shall, officiously, at the expense of the

local business entity, communicate the constitution and the statutes, well

as the respective amendments, to the Public Prosecutor's Office and the Directorate General

of the Local Authorities and ensure their respective publication under the law

of commercial registration.

Article 47.

[...]

1-The simultaneous exercise of functions in the municipal and local chambers is prohibited

remunerated functions, to any title, in municipal companies,

intermunicipal and metropolitan, as well as in participating companies

by municipalities.

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2-The simultaneous exercise of mandate in assembly shall also be prohibited

municipal and executive or non-executive functions in the companies

municipal, intermunicipal and metropolitan areas held or participated by the

municipality in which he was elected.

3-[...].

4-[...]. "

Article 3.

Addition to Law No. 53-F/2006 of December 29

It is added to Law No. 53-F/2006 of December 29, as amended by the Leis n. ºs 67-A/2007, of

December 31, and 64-A/2008, of December 31, Article 27-A, with the following

wording:

" Article 27.

Obligation of information

Companies keep permanently updated on their webpage

the following information:

a) Contract of society and statutes;

b) Structure of social capital;

c) Identity of the members of the social bodies and their note

curriculum;

d) Total remuneration, fixed and variable, earned by each member

of the social bodies;

e) Number of workers disaggregated according to the modality of

linkage;

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f) Plans for annual and multiannual activities;

g) Annual and multi-annual investment plans;

h) Annual budget;

i) Annual reporting documents, specifically the

annual report of the body of management, the balance sheet, the demonstration

of results and the opinion of the supervisory body ;

j) The social holdings held. "

Article 4.

Suspension

1-Without prejudice to the provisions of paragraph 4, the possibility of the municipalities shall be suspended,

associations of municipalities and metropolitan areas of Lisbon and the Port create

companies or acquire stakes in commercial companies.

2-It is also suspended the possibility of the entities that integrate the sector

local business constituting or acquiring any shareholdings in societies

commercials.

3-The practiced acts and contracts concluded in violation of the provisions of the figures

previous are nulls.

4-In exceptional and duly substantiated situations, the members of the Government

responsible for the areas of finance and local administration may authorize

jointly, by dispatch published in 2 th Journal of the Republic Journal and under

proposal of the body, service or entity that requires such an exception, the creation of

companies or the acquisition of shareholdings in commercial companies.

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Article 5.

Entry into force

This Law shall come into force on the day following that of its publication.

Seen and approved in Council of Ministers of August 25, 2011

The Prime Minister

The Deputy Minister and Parliamentary Affairs