ORGANIC FISCAL LAW

Version 2.1 definitive project version · Consolidated implementing text

Version 2.1 definitive: expands operational protocols and implements the Recovery Regime with the dual B_t^EST/B_t^REC gap.

Editorial note: proposed complementary law. The numbering is restructured and replaces the extensive numbering of earlier working drafts.

TITLE I — GENERAL PROVISIONS, HIERARCHY, AND DEFINITIONS

Article 1 — Purpose

This Law implements the Fiscal Constitution without authority to alter its substance, formulas, percentages, periods, or conditions governing exceptions.

Article 2 — Hierarchy

Every provision of this Law shall be interpreted as subordinate to the Fiscal Constitution; doubt may not be resolved by creating additional fiscal capacity.

Article 3 — Fiscal Perimeter

A versioned register of the Computable Fiscal Public Sector shall be maintained using criteria of control, risk, dependence, and guarantees.

Article 4 — Economic Substance

Transactions shall be classified according to their individual and combined economic effect.

Article 5 — Linked Transactions

Two or more acts shall be integrated where their formal separation prevents the combined substance from being reasonably reflected.

Article 6 — Revenues

R_t*, R_t^tot, and R_t^temp shall be distinguished. R_t* shall be measured on a cash-received basis, with anti-fraud temporal attribution: collection must have actually been received during the period and may not be brought forward from future periods or include refundable resources, financing, or non-structural items.

Article 7 — Expenditures

G_t^ef, G_t^ord, G_t^EM, G_t^base, and G_t^max shall be distinguished.

Article 8 — Stocks and Flows

Every methodology shall identify whether an item is a stock or a flow and its cutoff date.

Article 9 — Projected and Actual

Projections shall be unequivocally identified and shall never replace actual data in definitive certifications.

Article 10 — NULL

The absence of data shall not be treated as zero.

TITLE II — INDEPENDENT FISCAL OFFICE

Article 11 — Nature

The Independent Fiscal Office (IFO) is the independent primary technical body for measurement, certification, and disclosure.

Article 12 — Governance

It shall be collegial, with an odd number of members, staggered terms, and non-renewable terms except under a strictly defined exceptional provision.

Article 13 — Appointment

Appointment shall combine assessment of qualifications, publicity, a hearing, and enhanced institutional approval.

Article 14 — Removal

Removal shall be permitted only for objective cause, with due process and a reasoned decision.

Article 15 — Personnel

The IFO shall select technical personnel on merit and under incompatibility rules.

Article 16 — Budget

It shall have autonomy and sufficient resources; material reductions shall be publicly justified.

Article 17 — Data

It shall have direct access to primary sources, contracts, systems, and audit logs.

Article 18 — Publication

It shall publish without prior authorization and according to a schedule.

Article 19 — Recharacterization

It may fiscally recharacterize transactions by applying pre-existing and reasoned criteria.

Article 20 — Limits

It shall not set taxes, sectoral cuts, policies, or criminal sanctions.

Article 21 — Audit of the IFO

It shall be subject to external financial, operational, technological, and process audits.

Article 22 — Dissents

Dissenting opinions may be published without multiplying official certifications.

TITLE III — CERTIFICATION, SCHEDULE, AND DISCLOSURE

Article 23 — Schedule

The IFO shall publish a predetermined annual certification schedule.

Article 24 — Statuses

Certifications may be preliminary, revised, and definitive.

Article 25 — Minimum Content

Every certification shall identify DataVersion, MethodVersion, CodeVersion, Cutoff, PerimeterVersion, and Status.

Article 26 — Reproducibility

A data snapshot and reproducible calculation package shall be retained.

Article 27 — Corrections

Every correction shall create a new version without deleting the prior one.

Article 28 — Restatement

The as-reported version shall be distinguished from the restated series.

Article 29 — Publication

There shall be a persistent, downloadable archive with verifiable authenticity.

Article 30 — Response

Controlled entities may respond, but may not veto publication.

Article 31 — Discrepancies

An independent procedure shall resolve technical divergences without creating fiscal capacity while the dispute is pending.

TITLE IV — BUDGET, EXPENDITURE, AND REBALANCING

Article 32 — Budget

The budget shall demonstrate ex ante compatibility with G_t^max and the other rules.

Article 33 — Accrual

Expenditure shall be attributed to the economic event, not to the payment date.

Application protocol. The attribution date shall be the date of verifiable economic receipt of the good, service, construction progress, or acquired right. The date of invoice, payment order, or financial settlement shall constitute auxiliary evidence and may not displace the economic period.

Obligations received before closing shall be recorded even where administrative documentation is completed later. The IFO shall reconcile budgetary accrual, balance-sheet accounting, trade debt, and subsequent payments in order to detect deferrals.

Article 34 — Real Investment

Real investment forms part of Computable Primary Expenditure.

Article 35 — Financial Transactions

Pure financial transactions shall be identified separately.

Article 36 — Public Works

They shall be recognized according to verifiable physical and economic progress.

Article 37 — Advances

Advances to suppliers shall be treated as assets until the corresponding performance occurs.

Article 38 — PPPs and Leasing

They shall be disaggregated into expenditure, principal, service, and financial cost.

Article 39 — Capitalizations

A test of economic value received shall be applied.

Article 40 — Public Loans

A recoverability test shall be applied.

Article 41 — Offsets

Tax or contractual offsets shall preserve gross traceability.

Article 42 — Normative Base

G_t^base shall be the valid ordinary G_t^max plus authorized structural base adjustments.

The base shall be reconciled through an annual bridge identifying: the prior ordinary maximum; permanent adjustments for powers or responsibilities; permanent perimeter adjustments; error corrections; and the resulting base. Each adjustment shall be symmetrical with respect to related resources, expenditure, and liabilities.

The base shall not include emergency expenditure, unlawful excesses, expenditure financed by transitory revenues, temporary accelerations of investment, or items created to consume margin before closing.

Article 43 — No Capitalization

Unlawful excess and emergency expenditure shall not increase G_t^base.

Article 44 — Re-approximation

Under-execution shall not reduce the base; re-approximation may limit the speed of execution.

Article 45 — Structural Gap

B_t^EST=max(0,G_t^ef-R_t*) shall measure the observed effective gap. B_t^REC=max(0,G_t^base-R_t*) shall measure the recovery gap relative to the authorized ordinary base. Both shall be published separately from the actual financial result.

While B_t^REC > 0 or B_t^EST > 0, the Recovery Regime shall be activated or maintained automatically. The budget for the following period may not provide for ordinary nominal growth of G_t^base. An increase in R_t* shall close the gap without authorizing new ordinary growth of the limit.

The certification shall show, at a minimum, initial and final R_t*, G_t^ef, G_t^base, B_t^EST, and B_t^REC, revenue variation, expenditure variation, and the effect of perimeter changes. Transitory revenues shall not be admitted for declaring any gap closed.

Article 46 — Rebalancing

A persistent material gap shall require a finite rebalancing trajectory without creating a new debt limit.

The rebalancing plan shall complement, and not replace, the freezing of the base. It may contain voluntary expenditure reduction, improvement of structural revenues, and permanent reforms, but may not postpone compliance with debt, financial-cost, or emergency limits.

The phase shall end only upon simultaneous definitive certification of B_t^REC=0 and B_t^EST=0. The following period shall return to the ordinary rule without any bank of accumulated growth.

TITLE V — DEBT, REFINANCING, AND FINANCIAL COST

Article 47 — Debt Register

Each material obligation shall have an ID_DEBT and a complete genealogy.

Article 48 — Valuation

Debt shall be measured by the economic contractual obligation, not by an opportunistic market price.

Article 49 — Refinancing

Only the portion actually applied to pre-existing debt shall be REF_t.

Article 50 — New Money

Any additional, released, or diverted portion shall be NM_t.

Article 51 — Prefinancing

It shall require identified debt, a limited window, a reasonable amount, segregation, and subsequent cancellation.

The ordinary coexistence window, its justification, and the destination of funds shall be published before the transaction. The funds shall remain identified in segregated accounts or records and may not finance ordinary expenditure. Cancellation of the replaced debt shall be verified through documentation.

If the intended cancellation has not occurred when the window expires, the coexisting portion shall be treated as new money from the moment it lost its transitory character, without prejudice to liability.

Article 52 — Trade Debt

Abnormal arrears, refinancing, or interest-bearing plans may become computable financial debt.

Article 53 — Securitization

The assignment of future revenues with the substance of credit shall constitute debt.

Article 54 — Repos

Sale-and-repurchase transactions shall be analyzed according to the actual transfer of risk.

Article 55 — Guarantees

The transition from contingency to debt shall simultaneously eliminate double counting.

Article 56 — Financial Cost

I_t shall include every cost economically equivalent to the price of financing.

Measurement shall include nominal and effective interest, placement discounts, premiums, mandatory fees, guarantee costs, financial components of PPPs and leasing, contractual indexation of a financial nature, and equivalent payments.

The IFO shall publish a reconciliation among contractual cost, accounting cost, and computable fiscal cost, identifying exclusions and netted hedges. No change in contractual denomination shall alter the substance of the cost.

Article 57 — Hedges

Only validly linked hedges may be netted against cost; the gross amount shall be published.

Article 58 — Ex Ante Control

Every material debt transaction shall undergo cost stress testing and a compatibility test with D_t^max and I_t^max.

TITLE VI — CONSTITUTIONAL STABILIZATION FUND

Article 59 — Computable Value

F_t=min(F_t^liq,CG_t).

The Fund shall maintain an instrument-by-instrument inventory including market value or a verifiable prudential method, haircut, availability, encumbrances, currency, counterparty, and estimated realization period. The computable value shall be the lesser of prudential liquidity and genuine capital.

Stress tests shall simultaneously contemplate price declines, widening spreads, depreciation, market restrictions, and correlation with a domestic fiscal crisis.

Article 60 — Prudential Liquidity

F_t^liq shall apply haircuts, restrictions, concentration, and liquidity under stress.

Article 61 — Genuine Capital

CG_t shall exclude debt, circularities, and mere asset transformation without net saving.

Article 62 — Own Assets

Intra-perimeter securities and receivables shall be neutralized or excluded.

Article 63 — Encumbered Assets

The unavailable portion shall be deducted.

Article 64 — Diversification

Concentration and correlation with domestic fiscal shocks shall be limited.

Article 65 — Use

Every use shall reduce the computable balance and shall be traceable.

Article 66 — Replenishment

Only real increases in F_t shall count as replenishment.

Article 67 — Management

The Fund manager shall be distinct from the certifying body.

Article 68 — Stress

Periodic liquidity, market, and correlation stress tests shall be performed.

TITLE VII — FISCAL EMERGENCIES

Article 69 — Causality

An emergency requires an extraordinary cause and may not cover ordinary mismanagement.

Each declaration shall identify the causal event, start date, affected population or function, verifiable baseline, and causal chain between the event and each extraordinary expenditure. An item without a documented causal link shall remain subject to the ordinary rule.

A mere decline in revenue, ordinary budget insufficiency, or a pre-existing policy decision shall not, by itself, constitute a fiscal emergency.

Article 70 — Incrementality

CE_t shall include only incremental cost relative to the baseline.

Article 71 — Resources

RE_t shall include applicable extraordinary resources; NFE_t shall be net.

Article 72 — Causal Continuity

Substantially identical emergencies shall form a single sequence.

Article 73 — Plurality

Simultaneous emergencies shall not multiply limits.

Article 74 — Urgency

A very brief executive activation may be permitted subject to ratification.

Article 75 — Extension

Each extension shall require new evidence and a sunset provision.

Article 76 — Reconciliation

Preliminary estimates shall be reconciled with actual costs and resources.

Within the regulatory period following closing, preliminary CE_t and RE_t shall be compared with actual values. Any excess financing or non-causal expenditure shall be reclassified and incorporated into the corresponding exit or correction plan.

The reconciliation shall preserve the preliminary versions and quantitatively explain each difference.

Article 77 — No Base Effect

Extraordinary expenditure and debt shall not create ordinary future entitlements.

Article 78 — Exit

Every emergency shall have an Exit_EM covering normalization, debt, and replenishment of the Fund.

Article 79 — Extreme Catastrophe

The extreme clause shall require an existential threat, the most reinforced institutional procedure applicable under the general Constitution, a brief duration, review, and return.

TITLE VIII — CONVERGENCE, REPLENISHMENT, AND CORRECTION

Article 80 — Gaps

Each gap shall have its own trajectory.

Article 81 — Plan

Every plan shall specify origin, horizon, milestones, measures, assumptions, stress testing, and closure.

The plan shall contain an annual or quarterly table, according to materiality, showing the initial gap, target, result, deviation, cause, corrective measure, and age of the trajectory. Macroeconomic assumptions shall be identified separately from normative obligations.

Revisions shall preserve the original gap and Age_CONV. A new version shall not replace the compliance history.

Article 82 — Horizon

It shall be finite and reasonable; exceptional extensions shall be justified.

Article 83 — No Backloading

The entire adjustment shall not be unreasonably concentrated at the end.

Article 84 — No Reset

A change of government, methodology, or plan shall not automatically restart the clock.

Article 85 — No Bank

Early over-compliance shall not create a right to reverse course.

Article 86 — Rescheduling

Only for objective cause, with a bridge between versions.

Article 87 — Multiple Gaps

An improvement shall not offset another gap unless an express rule so provides.

Article 88 — Risk Substitution

There shall be no apparent convergence through shifting debt to guarantees or entities.

Article 89 — Closure

The trajectory closes upon certification of a zero gap.

TITLE IX — DATA, METHODOLOGY, SYSTEMS, AND AUDIT

Article 90 — Catalog

There shall be a master catalog of data, sources, and metadata.

Article 91 — Identifiers

ID_ENT, ID_DEBT, ID_REF, ID_EM, ID_TX, and ID_CERT shall be unique.

Article 92 — Audit Logs

Changes shall be traceable, and audit logs may not be deleted by those who modify data.

Article 93 — NULL

0, NULL, NA, and PEND shall be distinguished.

Article 94 — Units

Currency, unit, period, entity, and status shall be mandatory.

Article 95 — Redenomination

Every currency conversion shall use a uniform master table.

Article 96 — Versioning

Data, methodology, and code shall be versioned jointly.

Article 97 — Code

Coded rules shall have regulatory-compliance tests.

Each constitutional formula shall have at least unit tests covering normal values, zero, missing data, extremes, currency changes, and exact limits. The calculation package shall make it possible to reproduce a certification from the published snapshot.

A code change without a normative change shall demonstrate equivalence of results; if it changes material results, it shall be treated as a methodological change and shall require explanation, versioning, and audit.

Article 98 — Closing

Post-closing adjustments and grounds for reopening shall be identified.

Article 99 — Resilience

Backups, restoration, document retention, and continuity shall be mandatory.

Article 100 — AI

AI may assist, but no opaque or autonomous material decision shall be binding.

Article 101 — Privacy

Control access and disclosure shall comply with purpose limitation, minimization, and security.

TITLE X — RESPONSIBILITIES AND CONSEQUENCES

Article 102 — Four Levels

Fact, objective non-compliance, institutional responsibility, and personal liability shall be kept separate.

Article 103 — Exogenous Causes

Shock, emergency, devaluation, interest rates, or inherited conditions shall not create automatic culpability.

Article 104 — Reasonable Error

A good-faith technical error shall be assessed according to diligence and the evidence available.

Article 105 — Gross Negligence

Indifference to material warnings may give rise to liability.

Article 106 — Fraud

Falsification, concealment, destruction of evidence, and coordinated circumvention shall be aggravating factors.

Article 107 — Obstruction

Material obstruction of the IFO or an audit shall constitute a serious violation.

Article 108 — Fraudulent Emergency

Declaring or maintaining a fictitious emergency shall receive aggravated treatment.

Article 109 — Due Process

Any personal liability shall require individual attribution, a defense, and a competent body.

Article 110 — IFO

The IFO shall certify facts and refer the relevant record; it shall not replace courts or sanctioning authorities.

Article 111 — Inheritance

A new administration inherits the institutional obligation, not the personal fault of the previous administration.

TITLE XI — TRANSITION AND FINAL PROVISIONS

Article 112 — Non-Retroactivity

This Law shall not retroactively render prior acts unlawful.

Article 113 — Continuity

Inherited debt, contracts, risks, and gaps remain economically in force.

Article 114 — Initial Inventory

A comprehensive opening inventory and a six-year reconstruction shall be carried out.

Article 115 — Initial Certification

There shall be CERT_0_PRE and CERT_0_DEF.

Article 116 — Initial Plans

Convergence, rebalancing, and Fund plans shall be adopted where applicable.

Article 117 — Incomplete Data

Prudential estimates shall be identified and fictitious zeros shall not be used.

Article 118 — Technological Adaptation

A plan shall be established for data, identifiers, audit logs, versioning, and archiving.

Article 119 — End of Transition

The transitional regime shall have an objective termination condition.

Article 120 — Functional Repeal

Incompatible rules shall be inapplicable to the extent of their incompatibility.

Article 121 — Entry into Force

Staggered entry into force may not create a control vacuum.

FINAL INTERPRETATIVE PROVISION

No provision of this Law may be interpreted so as to modify a constitutional reservation. The Technical Annexes are instrumental and remain subordinate to this Law and to the Fiscal Constitution.