Political Constitution of Colombia (1991)

Except for what the Constitution provides, an Act shall determine, at the initiative of the Government, the services for which the Nation and the Departments, Districts, and Municipalities are responsible. In order to take care of the services for which they are responsible and to supply the resources for their adequate provision, the General System of Shares of the Departments, Districts, and Municipalities is hereby established.

The Districts shall have the same competences as the municipalities and departments for the purposes of distribution of the General System of Shares that the Act establishes.

For these purposes, the indigenous territorial entities, shall be beneficiaries, once they are constituted. Likewise, the Act shall designate the indigenous reservations as beneficiaries, provided that they have not constituted themselves as indigenous territorial entities.

The resources of the General System of Shares of the departments, districts and municipalities shall be earmarked for the financing of the services for which they are responsible, according priority to the health service, the services of pre-school, primary, secondary and intermediate education, and public services concerning drinking water and basic sanitation in the home, ensuring the provision of the services and the extension of coverage with an emphasis on the poor.

Taking into account the principles of solidarity, complementarity and subsidiarity, the Act shall establish the cases in which the Nation may contribute to the financing of the expenditure of those services which, in accordance with the determination made by statute fall within the competence of the departments, districts and municipalities.

The Act shall regulate the criteria of distribution of the General System of Shares of the Departments, Districts and Municipalities, in accordance with the competences which it assigns to each of these entities; it shall contain the provisions necessary for the implementation of the General System of Shares, incorporating principles of distribution which take into account the following criteria:

In the sectors of education, health, drinking water and basic sanitation: the population that has been taken care of and the population that shall be taken care of, the distribution of the urban and rural population, administrative and fiscal efficiency, and equity. In the distribution per territorial unit of each of the constituent entities of the General System of Shares, priority shall be given to factors which favor the poor, in the terms established by statute;

In other sectors: population, the distribution of the urban and rural population, administrative and fiscal efficiency, and relative poverty.

Competences may not be decentralized without the previous allocation of sufficient fiscal resources for their discharge.

The distribution of the resources of the General System of Shares of the Departments, Districts and Municipalities shall take place by sectors defined by statute.

The amount of the resources that are assigned to the sectors of health and education may not be lower than the amount transferred to each of these sectors on the enactment of the present Legislative Act.

The city of Buenaventura is organized as Special, Industrial, Port, Biodiversity and Biotourism Districts. Its political, fiscal and administrative system shall be determined by the Constitution and special statutes enacted to this end and, insofar as the latter do not contain the required regulations, by the rules which apply to the municipalities.

The National Government shall define a strategy for monitoring, follow-up and comprehensive control with regard to the expenditure of the territorial entities with resources from the General System of Shares in order to ensure the fulfillment of the criteria for coverage and quality [of services]. This strategy must extend the space for citizen participation in respect of social control and accounting procedures.

In order to apply and fulfill the provisions of the preceding section the National Government shall, within a period not exceeding six months following the signing of this Legislative Act, adopt, among other things, the pertinent rules defining the situations in which the adequate provision of services incumbent on the territorial entities is at risk, the measures which may be taken to avoid such situations and the effective determination of the required corrective action.

The Government must present a bill regulating the organization and functioning of the General System of Shares of the Departments, Districts and Municipalities, on the first month of sessions of the forthcoming legislative period, at the latest.

The amount of the General System of Shares of the Departments, Districts and Municipalities shall be increased annually by a percentage equal to the average percentage variation that the current revenues of the Nation have experienced during the four (4) preceding years, including the one corresponding to the estimate for the budget in execution.

For the purpose of calculating the variation of the current revenues of the Nation referred to in the preceding subparagraph, the taxes resulting from State of Exception measures shall be excluded, unless Congress makes them permanent in the following year.

Seventeen percent (17%) of the resources of the General System of Shares for spending purposes shall be distributed among the municipalities with a population inferior to 25.000 inhabitants. These resources shall be spent exclusively on investment, in accordance with the competences assigned by statute. The distribution of these resources shall be based on the same criteria of population size and poverty as defined by the Act on the Shares for General Purposes.

The municipalities classified in the fourth, fifth and sixth categories in accordance with the rules in force may freely spend up to forty-two percent (42%) of the resources they receive from the General System of Shares for General Purposes for investment and other expenses inherent in the functioning of the municipal administration, with the exception of the resources distributed in accordance with the preceding section.

When a territorial entity achieves universal coverage and meets the quality standards established by the competent authorities in the sectors of education, health, and/or public services concerning drinking water and basic sanitation in the home, according to certification by the competent national entity, it may spend the surplus resources on investment in other sectors within its competence. The National Government shall regulate the matter.

The amount of the General System of Shares, GSS, of the Departments, Districts and Municipalities shall increase by taking as its base the amount dished out during its previous period of application. During the years 2008 and 2009 the GSS shall increase at a rate equal to the inflation rate, with an additional increase in real terms of 4%. During the year 2010, the increase shall equal the inflation rate, with an additional increase in real terms of 3.5%. Between the year 2011 and the year 2016 the increase shall equal the inflation rate, with an additional increase in real terms of 3%.

If the rate of real growth of the economy (Gross Domestic Product, GDP) certified by DANE for the respective year is superior to 4%, the increase of the GSS shall equal the inflation rate, with an additional increase in real terms as indicated in the Transitional Paragraph 1 of the present Article, plus the difference in percentage points which results from a comparison of the real growth of the economy certified by DANE and the 4%. These additional resources shall be spent on comprehensive care for small children. The increase of the GSS resulting from higher economic growth which is the object of the present section shall not constitute the basis for the funding of the GSS in subsequent years.

The General System of Shares, GSS, shall receive an increase in funding in addition to the increases referred to in the preceding transitional paragraphs with regard to the education sector. This additional increase shall take place in the following stages: in the years 2008 and 2009, it shall equal one point three percent (1.3%), in the year 2010 one point six percent (1.6%), and during the years 2011 to 2016 one point eight percent (1.8%). In each of these years, the additional increase shall not constitute the basis for the funding of the System in the subsequent period of application. The resources shall be spent on coverage and quality.

The National Government shall define a number of criteria and transitional arrangements in the application of the results of the last census with the objective of avoiding negative effects resulting from the variations in the census data on the distribution in the General System of Shares. The System shall direct the necessary resources in such a way as to avoid under all circumstances a reduction in the level of funding which the territorial entities currently receive for reason of diminishing population size.

For the consequences contemplated in the two above articles, current revenues are to be understood as those constituted by tax and nontax revenues with the exception of capital revenues.

No national revenues shall be specifically earmarked. Excepted are the following:

The shares provided in the Constitution for the benefit of Departments, Districts, and Municipalities.

Those earmarked for social investment.

Those which, based on the earlier laws, the nation assigns to social forecasting entities and the former intendencies and police districts.

The exploitation of a non-renewable natural resource shall give rise to an economic offset in the form of concession fees (regalía) for the benefit of the State, without prejudice to any other right or compensation which might be agreed upon. An Act shall determine the conditions for the exploitation of non-renewable natural resources.

Upon the initiative of the Government, a separate Act shall determine the distribution, objectives, purposes, administration, collection, control, efficient use and destination of the revenues resulting from the exploitation of non-renewable natural resources, laying down the conditions for participation of their beneficiaries. The totality of revenues, assignments, organs, procedures and regulations shall constitute the General System of Concession Fees (Sistema General de Regalías).

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.

The assets and revenues originating from taxes or other sources relating to the exploitation of monopolies of the territorial entities are their exclusive property and enjoy the same guaranties as the property and income of individuals.

Departmental and municipal taxes enjoy constitutional protection and, consequently, an Act may not transfer them to the nation, except temporarily in the case of a foreign war.

The tax system is based on the principles of equity, efficiency, and progressivity.

The tax laws shall not be applied retroactively.

The domestic and foreign indebtedness of the nation and the territorial entities may not exceed their capacity for repayment. An Act shall regulate this matter.

The public services are inherent in the social purpose of the State. It is the duty of the State to insure the efficient provision thereof to all the inhabitants of the national territory.

The public services shall be subjected to the juridical regime determined by an Act, may be provided by the State directly or indirectly, by organized communities, or by individuals. In any case, the state shall maintain the regulation, control, and application of said services. If, for reasons of sovereignty or social interest, the State, by means of an Act approved by the majority of the members of both Houses upon the initiative of the Government, should decide to earmark for itself specific strategic or public service activities, it must indemnify, beforehand and fully, those individuals who by virtue of the said law are deprived of the exercise of a lawful activity.

The general well-being and improvement of the population’s quality of life are social purposes of the State. A basic objective of their activity shall be to address the unfulfilled public health, educational, environmental, and drinking water needs of those affected.

For such an outcome, in the plans and budgets of the nation and of the territorial entities, public social expenditures shall have priority over any other allocation.

An Act shall determine the relative jurisdictions and responsibilities for the provision of domestic public services, their coverage, quality, and financing, and the schedule of rates taken into account in addition to the cost criteria, those of solidarity, and of redistribution of revenues.

Home public services shall be provided directly by each municipality when the technical and economic characteristics of the service and the general benefits permit them and make them advisable, and the departments shall execute functions of support and coordination.

An Act shall determine the competent entities that shall determine rates.

The nation, departments, districts, municipalities, and decentralized entities may grant subsidies in their respective budgets so that individuals with lower incomes may pay the rates of home public services that cover their basic necessities.

An Act shall determine the duties and rights of users, the regime of their protection, and their forms of participation in the management and funding of the State enterprises that provide the service. Similarly, an Act shall define the participation of the municipalities or their representatives in the entities and enterprises that provide the home public services.

It is the responsibility of the President of the Republic to stipulate, subject to the relevant statute, the general policies of administration and efficiency control of the home public services and to exercise through the Office of the Superintendent of Home Public Services the control, inspection, and oversight of the entities that provide them.