Political Constitution of Colombia (1991)

The revenues from the General System of Concession Fees shall be used for the financing of projects for the social, economic and ecological development of the territorial entities; for savings to meet their pension obligations; for material investments in education and investments in science, technology and innovation; for generating public savings; for the control of the exploration and exploitation of deposits and the study and geological mapping of the subsoil; and for increasing the general competitiveness of the economy in the attempt to improve the social conditions of the population.

The departments, municipalities and districts in whose territory the exploitation of non-renewable natural resources takes place, as well as the municipalities and districts with sea and river ports through which these resources, or products derived from them, are transported, shall have the right to receive a share of the concession fees and compensations, as well as the right to directly use these resources.

For the purpose of fulfilling the objectives and ends of the General System of Concession Fees, a Science, Technology and Innovation Fund, a Development Fund, a Regional Compensation Fund and a Savings and Stabilization Fund shall be created.

The revenues from the General System of Concession Fees shall be distributed as follows: a percentage equivalent to 10% [of the total revenue] [shall go] to the Science, Technology and Innovation Fund; 10% [shall go] to the regional pension savings [funds], and up to 30% to the Savings and Stabilization Fund. The remaining resources shall be distributed in a percentage of 20% to the direct transfers referred to in section 2 of this Article, and in a percentage of 80% to the Regional Compensation and Regional Development Funds. Of the total resources assigned to the two latter Funds, a percentage equivalent to 60% shall be assigned to the Regional Compensation Fund and a percentage of 40% to the Regional Development Fund.

Of the revenues from the General System of Concession Fees, a percentage of 2% shall be assigned to the control of the exploration and exploitation of deposits and the study and geological mapping of the subsoil. This percentage shall be deducted in a proportional manner from the total revenue of the General System of Concession Fees distributed in the preceding section. The functions established here shall be carried out by the Ministry of Mining and Energy or the entity to which the latter delegates them.

The sum of the resources corresponding to the direct transfers referred to in section 2 of this Article, and the resources of the Regional Development Fund and the Regional Compensation Fund shall increase annually by a rate corresponding to half of the growth rate of the total revenue of the General System of Concession Fees. The Act which shall regulate the system shall define a mechanism for mitigating the decrease of the aforementioned resources resulting from a drastic reduction of the revenues of the General System of Concession Fees.

The difference between the total revenue from the General System of Concession Fees and the resources assigned to the regional pensions savings, the Science, Technology and Innovation Fund, the Regional Development Fund, the Regional Compensation Fund and those referred to in section 2 of this Article shall be assigned to the Savings and Stabilization Fund.

The Science, Technology and Innovation Fund and the Regional Development Fund shall have the purpose of financing regional projects which have been agreed between the territorial entities and the National Government.

The resources of the Regional Compensation Fund shall be assigned to the financing of development projects of regional or local impact in the poorest territorial entities, in accordance with the criteria for Basic Unsatisfied Needs (Necesidades Básicas Insatisfechas—NBI), population and unemployment, and with priority for coastal and border zones and the regions on the periphery. The lifetime of the Regional Compensation Fund shall be thirty (30) years, starting with the entry into force of the Act referred to in section 2 of the preceding Article. After this period has ended, the resources shall be assigned to the Regional Development Fund.

The resources of the Savings and Stabilization Fund, as well as its earnings, shall be managed by the Bank of the Republic in the terms established by the National Government. In periods of negative savings, the distribution of these resources among the other components of the System shall be governed by the criteria defined by the Act to which section 2 of the preceding Article refers.

In case the resources assigned annually to the Savings and Stabilization Fund exceed thirty percent (30%) of the annual revenue from the General System of Concession Fees, the surplus shall be distributed among the other components of the System, in conformity with the terms and conditions defined by the Act to which section 2 of the preceding Article refers.

The resources of the General System of Concession Fees shall not form part of the General Budget of the Nation, nor of the General System of Shares. The General System of Concession Fees shall have its own budgetary system which shall be governed by the provisions contained in the Act to which section 2 of the preceding Article refers. In any case the Congress of the Republic shall adopt the budget of the General System of Concession Fees every two years.

The use of the resources corresponding to the direct transfers referred to by section 2 of this Article, as well as of the resources of the Science, Technology and Innovation Fund, the Regional Development Fund, and the Regional Compensation Fund, shall take place in accordance with the National Development Plan and the development plans of the territorial entities.

The priority projects which are funded with these resources shall be defined by collegiate administrative and decision-making organs, in conformity with the provisions of the Act which regulates the General System of Concession Fees. In the case of the departments referred to in section 2 of this Article, the collegiate administrative and decision-making organs shall be composed of two (2) ministers or their representatives, the respective governor or his/her representative, and a representative number of mayors. The Act which regulates the General System of Concession Fees may establish committees of a consultative character for the collegiate administrative and decision-making bodies, with participation of the civil society. With regard to the municipalities and districts referred to in section 2 of this Article, the collegiate administrative and decision-making organs shall be composed by a representative of the National Government, the governor or his/her representative, and the mayor.

The programs and/or projects in technological science and innovation of the departments, municipalities and districts which are be funded with the resources of the Science, Technology and Innovation Fund shall be defined by a collegiate administrative and decision-making organ on which the National Government, represented by three (3) ministers or their representatives, one representative of the National Planning Body and a representative of the national body charged with the management of public policies in science, technology and innovation, which in addition shall discharge the functions of the technical secretariat, a governor for each of the regional planning authorities to which the following section of this article refers, four (4) representatives of the public universities and two (2) representatives of the private universities shall have seats. Moreover, the resources of the Science, Technology and Innovation Fund shall be distributed in the same proportional manner as the resources of the Regional Compensation Fund and the Regional Development Fund are distributed to the departments. In no case may resources of this Fund finance current expenditure.

The projects of regional impact of the departments, municipalities and districts which are funded with the resources from the Regional Development and Compensation Funds shall be defined through regional planning processes by collegiate administrative and decision-making organs on which four (4) ministers or their representatives, one representative of the National Planning Body, the respective governors or their representatives and a representative number of mayors shall have seats.

The Act which regulates the General System of Concession Fees may establish committees of a consultative character for the collegiate administrative and decision-making bodies, with participation of the civil society.

In any case the territorial entities shall enjoy majority representation in relation to the National Government in the collegiate organs.

A System of Monitoring, Follow-Up, Control and Evaluation shall be created for the General System of Concession Fees, which shall have as its object the supervision of the efficient and effective use of the resources of the General System of Concession Fees, thereby strengthening transparency, citizen participation and good government.

The Act referred to in section 2 of the preceding Article shall define its functioning and the procedure for the imposition of preventive and corrective measures and sanctions for the improper use of the resources of the General System of Concession Fees. These measures which may be applied to the departments, municipalities and/or districts and other executing agencies may include the suspension of transfers, the cancelation of projects and/or the restitution of resources.

The Act referred to in section 2 of the preceding Article shall also define the annual percentage of the resources of the General System of Concession Fees which is assigned to the functioning of the System of Monitoring, Follow-Up, Control and Evaluation of the Concession Fees. This percentage shall be deducted in a proportional form from the total revenues of the General System of Concession Fees distributed in the fourth section of this Article.

The National Concession Fees Fund shall be abolished from the date determined by the Act referred to in section 2 of the preceding Article. The National Government shall appoint the liquidator and shall determine the procedure and time limit for the liquidation. The resources of the National Endowment Fund which have not been used on the date of entry into force of this Legislative Act shall be assigned as a matter of priority to the reconstruction of the road infrastructure of the country and to the ecological recovery of the regions affected by the winter emergency of 2010-2011.

With regard to the resources which shall be assigned to the direct transfers referred to in section 2 of this Article and to the Regional Compensation and Regional Development Funds, their distribution shall be as follows during the first three years: during the first year a percentage of 50% shall accrue to the direct transfers referred to in section 2 of this Article and 50% to the funds referred to in this paragraph; in the same way, a percentage of 35% and of 65%, respectively, shall be assigned to these ends in the second year; and during the third year, a percentage of 25% and 75%, respectively.

If during the period between 2012 and 2014 the direct transfers referred to in section 2 of this Article are inferior to 50% of the annual average, in constant pesos of 2010, of the direct transfers which have been made, minus deductions imposed by statute, between 2007 and 2010; and during the period between 2015 and 2020 are inferior to 40% of the direct transfers which have been made, minus deductions imposed by statute, between 2007 and 2010, the department, municipality or district may use the resources assigned to the respective department in the Regional Development Fund up to the previously mentioned percentage or until the resources of the department in the said Fund are exhausted, whichever occurs first.

In the first year of the operation of the General System of Concession Fees twenty-five percent (25%) of its resources shall be assigned to the Sings and Stabilization Fund.

During the period 2012-2014, one-fifth of the annual resources of the Savings and Stabilization Fund shall be assigned to the direct transfers referred to in section 2 of this Article.

The National Government shall have a period of three (3) months following the promulgation of this legislative act for initiating before the Congress of the Republic the bill referred to in section 2 of the preceding Article, which adjusts the regime of concession fees to the new constitutional framework.

Once the bill referred to in the previous section has been presented, the Congress of the Republic shall have a period not exceeding nine (9) months for its approval. If the Act has not been adopted by Congress at the end of this period, the President of the Republic shall be authorized to regulate the matter by decrees having the force of law during one (1) month.

The General System of Concession Fees shall apply from January 10, 2012. If on this date the Act referred to in section 2 of the preceding Article has not entered into force, the National Government shall guarantee the operation of the System by transition decrees with the force of law, which it shall adopt on December 31, 2011 at the latest.

In order to ensure the effective distribution of the resources in the fiscal year 2012, the National Government shall adopt the budget of the General System of Concession Fees for the aforementioned fiscal year by way of a decree with the force of law.