Post by account_disabled on Feb 24, 2024 18:27:10 GMT -10
Financial Law enshrines the golden rule in article 167, III, of the Federal Constitution, prohibiting “ the carrying out of credit operations that exceed the amount of capital expenditure , except …”. The diction highlights the financial meaning of the norm, that is, the amount of loans made by the public authorities cannot exceed the amount of investment expenses .
Spacca
Will this standard be applicable when credit operations (loans) do not occur? Let's imagine the sale of a public asset, which is not characterized as a credit operation , but rather one of obtaining revenue , could this be spent on current expenses (paying staff or purchasing office materials)?
Article 44 of the Fiscal Responsibility Law (LC 101/00) complements the golden rule by stating that: “The application of capital income derived from the alienation of assets and rights that form part of public assets to finance expenditure is B2B Email List prohibited. current, unless…” . This rule states that, if assets are sold ( capital income ), the amount must be used for investments ( capital expenses ). Article 32 of the same law regulates this issue specifically for credit operations .
These rules read together determine that the amount of capital income , including that arising from loans , must be used for capital expenditure , that is, for investments . How is the correct application of these standards determined?
The Federal Supreme Court judged ADI 5.683-RJ, reported by Minister Roberto Barroso, ruling that: “ The prohibition of art. 167, III, of the CF does not prevent the contracting of credit operations to cover current expenses . Only contracts that exceed the amount of capital expenditure are prohibited .”
The motion for clarification ruling contains statements such as: “ It is, therefore, the Head of the Executive Branch who must analyze whether the operation to be carried out is compatible with the amount of capital expenditure . Authorization by the Legislative Branch represents just one of the constitutional requirements for carrying out credit operations. What the Constitution prohibits is that loans made from financial institutions controlled by the federal and state governments are used for the specific purpose of paying personnel expenses. Therefore, within the margin authorized by the Legislative Branch, the State can take out loans from these institutions, as long as it does not use the amounts arising from the credit operation to pay payroll. Obviously, nothing prevents the state of Rio de Janeiro from making loans with private financial institutions to pay current expenses in general or, specifically, expenses with active, inactive and retired personnel”.
From this judgment it is clear that the analysis cannot occur by headings , not even in credit operations, in which this direction and calculation would be more easily identified, and must be analyzed by amounts , which can only be identified ex-post through the balance sheet general public entity.
In the judgment it was stated that “nothing prevents the State of Rio de Janeiro from making loans with private financial institutions to pay current expenses in general or, specifically, expenses with active, inactive and retired personnel” , which points to the investigation of golden rule involving global amounts of capital revenue with capital expenditure, and not an isolated calculation , involving specific items.
Spacca
Will this standard be applicable when credit operations (loans) do not occur? Let's imagine the sale of a public asset, which is not characterized as a credit operation , but rather one of obtaining revenue , could this be spent on current expenses (paying staff or purchasing office materials)?
Article 44 of the Fiscal Responsibility Law (LC 101/00) complements the golden rule by stating that: “The application of capital income derived from the alienation of assets and rights that form part of public assets to finance expenditure is B2B Email List prohibited. current, unless…” . This rule states that, if assets are sold ( capital income ), the amount must be used for investments ( capital expenses ). Article 32 of the same law regulates this issue specifically for credit operations .
These rules read together determine that the amount of capital income , including that arising from loans , must be used for capital expenditure , that is, for investments . How is the correct application of these standards determined?
The Federal Supreme Court judged ADI 5.683-RJ, reported by Minister Roberto Barroso, ruling that: “ The prohibition of art. 167, III, of the CF does not prevent the contracting of credit operations to cover current expenses . Only contracts that exceed the amount of capital expenditure are prohibited .”
The motion for clarification ruling contains statements such as: “ It is, therefore, the Head of the Executive Branch who must analyze whether the operation to be carried out is compatible with the amount of capital expenditure . Authorization by the Legislative Branch represents just one of the constitutional requirements for carrying out credit operations. What the Constitution prohibits is that loans made from financial institutions controlled by the federal and state governments are used for the specific purpose of paying personnel expenses. Therefore, within the margin authorized by the Legislative Branch, the State can take out loans from these institutions, as long as it does not use the amounts arising from the credit operation to pay payroll. Obviously, nothing prevents the state of Rio de Janeiro from making loans with private financial institutions to pay current expenses in general or, specifically, expenses with active, inactive and retired personnel”.
From this judgment it is clear that the analysis cannot occur by headings , not even in credit operations, in which this direction and calculation would be more easily identified, and must be analyzed by amounts , which can only be identified ex-post through the balance sheet general public entity.
In the judgment it was stated that “nothing prevents the State of Rio de Janeiro from making loans with private financial institutions to pay current expenses in general or, specifically, expenses with active, inactive and retired personnel” , which points to the investigation of golden rule involving global amounts of capital revenue with capital expenditure, and not an isolated calculation , involving specific items.