Precatórios: Senate discusses PEC that eases municipal bills

The PEC was initiated by Senator Jader Barbalho (MDB-PA) and received a favorable vote from the rapporteur, Senator Carlos Portinho (PL-RJ) – who presented an alternative (substitute) text to the matter.

Changes to the proposal

Carlos Portinho extended the deadline for joining the installment plan for social security debts until July 31, 2025. In the original proposal, the deadline was December 31, 2023.

The original text of the PEC still provided that the payment of municipal court orders would be limited to the amount of 1% of the net current revenue recorded in the previous year. However, Portinho’s amendment sets different limits according to the volume of court orders to be paid.

The rapporteur justifies in the report that the 1% value would be restrictive and would hold back a high volume of court orders. In his assessment, the measure would cause losses to creditors. The new text establishes a limit of 2% of the RCL for municipalities whose stock of outstanding court orders does not exceed 15% of this value. In addition, it stipulates a limit of 4% for those in which the stock is between 15% and 30%.

If the stock exceeds 30% of the RCL, the limit will be suspended and the debtor municipality must honor a sufficient quantity of outstanding court orders so that the 30% level is reached again.

Senator Carlos Portinho highlights in his analysis of the PEC that, according to studies by the Legislative Consultancy of the Federal Senate – taking into account the stock of court orders declared by municipalities in the states of Rio de Janeiro (RJ) and São Paulo (SP) – all municipalities in RJ would benefit from the new limits proposed.

Furthermore, he considers that more than 97% of the municipalities in SP would also directly benefit from the new limits. The mayor of Campinas, municipality of São Paulo, Dário Saadi (Republicans), believes that the PEC will contribute to the fiscal balance of the municipalities and defends the approval of the proposal.

“It will contribute to the fiscal balance of cities, which have been under great pressure due to excessive responsibilities and the lack of transfers to municipalities by the Federal Government and the State Government. I hope that the Senate approves this amendment and that it comes into effect this year. It will undoubtedly help the city of Campinas,” highlights Dário Saadi.

Processing

The PECs are analyzed in two rounds – the first has five discussion sessions in the Plenary and the second needs to go through three sessions – before being voted on. And PEC 66/2023 has already had three discussion sessions in the Senate Plenary.

The text of the PEC was proposed by the National Confederation of Municipalities (CNM) and accepted by Jader.