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Law 9,790, dated March 23, 1999

Introduces rules for granting of
“Public Interest Civil Society Organisation” status
to non-profit private legal entities and
institutes and regulates the Partnership Terms.

THE PRESIDENT OF THE REPUBLIC

Let it be known that the National Congress decrees and sanctions the
following Law:

TITLE I

ON THE GRANTING OF PUBLIC INTEREST CIVIL SOCIETY
ORGANISATION STATUS

Art. 1 Private law, non-profit legal entities may be granted Public Interest
Civil Society Organisation status provided that their respective
organisational purposes and charter norms meet the requirements
established by this Law.

§ 1 For the purposes of this Law, a private law legal entity shall be
considered non-profit if it shall not di stribute to its members or associates,
board members, officers, employees or donors any eventual gross or net
operational gains, dividends, allowances, in terest in or share of that portion
of its assets resulting from the carrying out of its activities and if it shall
wholly apply the same towards achi eving its respective organisational
purposes.

§ 2 The granting of the status provided f or in this article shall be tied to
the meeting of the requirements established by this Law.

Art. 2 – The following entities shall not be allowed to pursuit the Public
Interest Civil Society Organisation status, even if they are in any way
involved in the activities described in art. 3 of this Law:

I – commercial businesses;

II – labour unions, labour category associations or professional guilds;

III – religious institutions or institutions dedicated to the dissemination of
devotional or confessional creeds, meetings, practices and viewpoints;

IV – political party organisations or similar entities, including their
foundations;

V – mutual associations designed to furnish goods or services to a
restricted circle of associates or members;

VI – entities or companies involved in the sale of health plans and similar
organisations;

VII – private hospitals who charge fo r their services, and their sponsors;

VIII – private schools providing form al education who charge for their
services and their sponsors;

IX – organizations qualified as “Social Organizations” under the terms of
the specific law;

X – Cooperatives;

XI – Foundations established under public law;

XII – private law foundations, civil so cieties or associations created by
public agencies or by pub lic law foundations;

XIII – Financial organizations having an y connection whatsoever to the
national financial system referred to in art. 192 of the Federal Constitution.

Art. 3 The status established by this Law , in observance of the principle of
universal access to services in the respective areas in which the
Organisations shall function, shall only be granted to private law, non-profit
legal entities whose organisational p urposes shall include at least one of
the following objectives:

I – promotion of social welfare;

II – promotion of culture, defense and conservation of artistic and historic
heritage;

III – free promotion of education, observing the complementary form of
organisational participation set forth in this Law;

IV – free promotion of health care, ob serving the complementary form of
organisational participation set forth in this Law;

V – promotion of nutriti onal and food security;

VI – defence, preservation and c onservation of the environment and
promotion of sustainable development;

VII – promotion of volunteerism;

VIII – promotion of economic and social development and the fight against
poverty;

IX – non-profit experimentation with new socio-productive models and
alternative systems of production, commerce, employment and credit
(micro-credit);

X – promotion of established rights and obtaining of new ones and
supplemental, free legal assistance;

XI – promotion of ethics, peace, citize nship, human rights, democracy and
other universal values;

XII – study and research, development of alternative technologies,
production and dissemination of information and technical and scientific
knowledge regarding the activities specified in this article;

Sole Paragraph. For the purposes of this article, dedication to the activities
provided for shall be established through the direct execution of projects,
programs and plans for related actions, by means of the donation of
physical, human and financial resources or through providing intermediate
support services to other non-profit organisations and to public sector
agencies operating in related areas.

Art. 4 Having met the requirements set forth in article 3, legal entities
seeking Public Interest Civil Society Organisation status must also be
governed by organisational charters whose norms expressly provide for the
following:

I – the observance of the principles of legality, impersonality, morality,
public disclosure, economy and efficiency;

II – the adoption of administrative m anagement practices necessary and
sufficient to prevent individuals or gro ups who participate in the respective
decision making processes from obtaining benefits or personal advantages;

III – the establishment of a audit committee or equivalent body with the
power to comment on financial and accounting activity reports and on
operations realised with organisational assets, including the power to
submit opinion papers to the hi gher bodies in the organisation;

IV – the provision that, in the event that the organisation is dissolved, its
net assets be transferred to another legal entity holding the status
described in this Law, preferably one with the same organisational
purposes;

V – the provision that, in the event that the legal entity loses the status
established by this Law, the respective available asset base acquired with
public resources during the period in which said status was in effect be
transferred to another legal entity holdi ng the status described in this Law,
preferably one with the same organisational purposes;

VI – the possibility of establishing remuneration for the directors of the
entity who effectively manage it and f or those persons who provide specific
services to it, in both cases said remuneration to be limited to the market
rate in the entity’s respectiv e region and operational area.

VII – the norms of accountability to be observed by the entity, requiring at a
minimum:

a) the observance of the fundamental principles of accounting as well as
the Brazilian Accounting Norms;

b) that at the end of each fiscal year, a report of the organisation’s
activities and its financial statement s, including certification of no
outstanding social securi ty debts, be publicly disseminated by any efficient
means, so as to be available for examination by any citizen;

c) the conducting of an audit, if necessary by outside, independent
auditors, of the investment of any re sources governed by the partnership
terms as provided for in these regulations;

d) that an accounting for all of t he publicly furnished resources received
by the Public Interest Civil Societ y Organisation be conducted according to
the procedure established by the sole paragraph of art. 70 of the Federal
Constitution.

Art. 5 Having met the requirements establ ished in arts. 3 and 4 of this Law,
a private law, non-profit legal entity seek ing to obtain the status established
by this Law shall submit a written request to the Ministry of Justice,
accompanied by notarised copies of the following documents:

I – the organisational charter as filed with the registry office;

II – the minutes recording the election of the current officers;

III – a statement of current assets a nd financial statements for the fiscal
year;

IV – a declaration of inco me tax exemption status;

V – proof of registration with the Tax Authorities.

Art. 6 Having met the requirements established in the preceding article, the
Ministry of Justice will decide on whether or not to grant the requested
status within thirty days.

§1 In the event the request is granted, the Ministry of Justice shall issue
a certificate verifying the status of th e requesting entity as a Public Interest
Civil Society Organisation within fifteen days of the decision.

§2 In the event the request is denied, the Ministry of Justice shall make
its decision known through publication in the Official Gazette within the
same time period established in §1.

§3 The status request shall only be denied if:

I – the requesting entity shall be an organisation of the type provided for
in art. 2 of this Law;

II – the requesting party shall not have met the requirements provided for
in arts. 3 and 4 of this Law;

III – incomplete documentation shall have been presented.

Art. 7 Public Interest Civil Society Organi sation status may be lost following
a request for or the decision of an adm inistrative or judicial proceeding,
originating either from a popular initiative or with the P ublic Attorney, said
proceeding to include the right to an ample defence and the due right to
respond to accusations made.

Art. 8 Observing the prerogatives of t he Public Attorney and provided that
he not be anonymous and that his a ccusations are based on evidence of
error or fraud, any citizen may initiate administrative or judicial proceedings
to remove the status established by this Law.

TITLE II

ON THE PARTNERSHIP AGREEMENT

Art. 9 The Partnership Agreement is her eby established as the instrument
to be signed by the Public Authorities and entities holding Public Interest
Civil Society Organisation status for the purpose of forming co-operative
ties between the parties in order to s upport and execute the public interest
activities provided for in art. 3 of this Law.

Art. 10 The Partnership Agreement, si gned by the mutual agreement of
the Public Authority and a Public In terest Civil Society Organisation, shall
provide for the rights, responsibilities and obligations of the signing parties.

§1 The signing of the Partnership Agreement shall be preceded by a
consultation of the existing Public Policy Councils of the corresponding
areas of operation at the respective levels of government.

§2 The following are essential claus es of any Partnership Agreement:

I – that concerning purposes, contai ning the specifications of the
program of activities proposed by the Public Interest Civil Society
Organisation;

II – that stipulating the goals and results to be achieved together with the
time period or schedule for their execution;

III – that expressly stating the object ive criteria to be used to evaluate
performance by means of indicators of the results achieved;

IV – that providing for the earnings to be received in fulfilment of the
organisation’s goals, stipulating item by item, the accounting categories to
be used by the organisation and deta iling the remuneration and personal
benefits to be paid to its officers, employees and consultants with
resources arising from or tied to the Partnership Agreement;

V – that establishing the obligations of the Public Interest Civil Society
Organisation, including, at the end of eac h fiscal year, that of presenting to
the Public Authorities a report on the execution of the organisational
purposes listed in the Partnership A greement; said report shall include a
specific comparison between the proposed goals and the achieved results,
followed by an account of the effect ively incurred expenses and received
earnings, independent of the provisions mentioned in section IV;

VI – that concerning the publication, either in the Municipal, State or
Federal Official Gazette, depending on the scope of the activities agreed to
by the partner agency and t he Public Interest Civil Society Organisation, of
an extract from the Partnership Agreem ent and of a physical and financial
execution statement, in the simplified m anner specified in the regulation of
this Law; said statement shall contai n the principal information of the
obligatory documentation required in section V; non-compliance may result
in non-payment of the resources provided for in the Partnership
Agreement.

Art. 11 The execution of the objectives of the Partnership Agreement
will be monitored by agencies of the Public Authorities in the operational
area corresponding to the supported ac tivity and by the existing Public
Policy Councils of the corresponding areas of operation at each level of
government.

§1 The results achieved from the execution of the Partnership
Agreement shall be analysed by a evaluation commission formed by
mutual agreement between the partner agency and the Public Interest Civil
Society Organisation.

§2 The commission shall submit a conclusive report on the evaluation
conducted to the competent authorities;

§3 Those Partnership Agreements desig ned to promote activities in the
areas provided for in this Law shall be subject to the organisational control
mechanisms provided for in applicable legislation.

Art. 12 Upon becoming aware of any irregularity or illegality in the use
of resources or assets of public origin by the partner organisation, those
persons responsible for monitoring the Partnership Agreement shall
immediately report such in formation to the Public Audit Court and to the
Public Attorney, under penalty of being held jointly liable.

Art. 13 in addition to the actions re ferred to in art. 12 of this Law, if
those persons responsible for the monitoring have solid indications of
misuse of public resources or assets, they must present such indications to
the Public Attorney and to the Federal Solicitor General’s Office in order to
permit them to request that a cour t of appropriate jurisdiction order the
arrest of the assets of the entity as well as those of its officers and
any
public agents or third parties who may have illegally enriched themselves
or otherwise harmed the public treasur y, together with other measures
specified in Law no. 8,429 (2 June 1992) and in Complementary Law no.
64 (18 May 1990).

§1 The period during which the assets are to remain arrested shall be
determined according to the terms of art s. 822 and 825 of the Code of Civil
Procedure;

§2 If necessary, the request shall include the investigation, examination
and arrest of assets, bank accounts a nd investments held by the accused
both nationally and internat ionally, in accordance with the terms of the the
law and international treaties.

§3 Until such time as the case is settled, the Public Authorities shall
continue to hold and mana ge the arrested or seized assets and funds and
shall seek to promote the continuance of the social activities of the partner
organisation;

Art. 14 Within at most thirty day s of the signing of the Partnership
Agreement, the partner organisation shall publish its own regulations
containing the procedures that it will adopt regarding the contracting of jobs
and services as well as regarding the hiring of labour with resources from
the Public Authorities, observing the principles established in item I of art. 4
of this Law.

Art. 15 In the event that the or ganisation acquires any real property
with resources arising from the sign ing of the Partnership Agreement, said
property shall be registered with a non-transferability clause.

TITLE III

FINAL AND TRANSITIONAL PROVISIONS

Art. 16 Organisations holding Public In terest Civil Society status are
hereby prohibited from participating in political party or election campaigns
in any way, shape or form whatsoever.

Art. 17 Upon presentation of a reques t by the interested parties, the
Ministry of Justice shall permit fr ee public access to all information
concerning Public Interest Civil Society Organisations.

Art. 18 Private law, non-profit legal entities granted other forms of
status under other legislation may reque st Public Interest Civil Society
Organisation status, provided that they meet the requirements necessary to
do so; said organisations are guaranteed the right to concurrently maintain
both forms of status for up to five years following the date when this Law
shall enter into effect.

§1 Following the expiration of the five year period, those legal entities
interested in maintaining the status provided for in this Law must opt f
or the
same, by which act they shall auto matically renounce any claim to the
status they previously held.

§2 In the event that the option provid ed for in the previous paragraph is
not exercised, the legal entity will automatically lose all claim to the status
obtained under the terms of this Law.

Art. 19 The Executive shall regulate this Law within thirty days.

Art. 20 This Law shall enter into e ffect on the date of its publication.

Brasilia, March 23, 1999; 178th year of Independence and 111th year of
the Republic.

FERNANDO HENRIQUE CARDOSO

Federal Official Gazette, March 24, 1999