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Rules for the FPE are still undefined.

Changes to the method of distributing the State Participation Fund (FPE) need to be revised by the end of 2012; however, the measure is at an impasse in the Federal Government and the National Congress.

Rules for the FPE are still undefined (Photo: José Cruz/ABr)

Raphael Coutinho _PE247 – The transfer of funds from the State Participation Fund (FPE) to the federative entities is threatened if the Federal Congress does not approve, by the end of the year, a proposal that regulates the distribution of these resources. This information is circulating behind the scenes at the Supreme Federal Court (STF). The highest court in the Brazilian justice system had already ruled, in 2010, that the current rules for sharing these transfers are unconstitutional. At that time, the STF gave a deadline until 2012 for deputies and senators to approve a new model.

The deadline is in about seven months, and the Federal Government has not yet indicated which proposal it will support. The impasse also surrounds the Chamber of Deputies and the Senate, which have not yet indicated which proposal to prioritize. The main obstacle to the approval of a new FPE rule in 2012 is the fact that it is a year of municipal elections.

Under the current rules governing the FPE (Fund for Participation of States), which have been declared unconstitutional, states with smaller tax bases, such as Amapá, Roraima, Acre, and Tocantins, receive a large influx of resources from the Union, reaching up to 50% of their revenue. The North, Northeast, and Central-West regions receive 85% of the resources, while the South and Southeast receive 15%. For São Paulo, for example, the FPE does not even represent 1% of its revenue.