General Budget 2016

Be approved as the estimation of Income of the Central Administration for the Fiscal Year 2016, the sum of ONE HUNDRED TWENTY-THREE THOUSAND, TWO HUNDRED SEVENTY-FIVE MILLION, SIX HUNDRED FIFTEEN THOUSAND, ONE HUNDRED THIRTY-NINE LEMPIRAS EXACT (L.123,275,615,139.00) in accordance with the following detail: TAX REVENUE 82,895,361,272.00 Income Tax 24,510,356,521.00 On the Income of Natural Persons 531,114,084.00 On the Income of Legal Entities 3,094,254,466.00 Payments on Account 7,974,396,693.00 DESCRIPTION VALUE 168-2015

Source Withholding 4,794,065,470.00 Withholding (Art. 5 and 25) 3,971,929,969.00 Withholding for Default (Art.50) 932,498,199.00 Interest Withholding (Art.9) 878,700,226.00 Capital Gains 374,228,947.00 Solidarity Contribution 1,480,827,635.00 Capital Gains (ZOLITUR) 13,423,875.00 Housing Rental (10%) 9,222,509.00 10% On Surplus from Operations of Private Educational Centers 3,893,948.00 ISR Advance Withholding 1% 448,213,969.00 Advance Perception Natural Income 1,332,140.00 Advance Perception Legal Income 2,254,391.00 Property Tax 662,483,610.00 On the Transfer of Real Estate 301,268,649.00 On Net Assets 360,702,600.00 On the Transfer of Land Ownership 512,361.00 Tax on Production, Consumption and Sales 38,553,939,468.00 On the Production of Beer 601,717,519.00 On the Production of Liquor 89,150,926.00 On the Production of Compound Liquor 132,804,139.00 On Forest Production 409,889.00 On the Production and Consumption of Carbonated Water 809,531,404.00 On Sales 15% 34,137,587,010.00 On Sales 18% 1,353,454,529.00 On the Sale of Cigarettes 640,964,421.00 On the Selective Consumption of Various Articles 396,772,860.00 On the Selective Consumption of Vehicles 359,677,877.00 On Sales (18%) Air Transport Tickets 27,667,529.00 DESCRIPTION VALUE

DESCRIPTION VALUE On Sales (5%) Electronic Lottery Tickets Raffles and Drawings 4,201,365.00 Tax on Services and Specific Activities 15,724,281,731.00 On Gaming, Betting or Gambling Casinos 2,049,446.00 On the Sale of Contracting Stamps 4,713,727.00 On the Revaluation of Assets 512,361.00 On Public Road Services 2,417,424,728.00 On Vehicle Transfer 24,388,414.00 Tax on Tourism Services 88,433,620.00 Contribution for Attention to Social Programs and Conservation of Road Heritage 10,785,315,167.00 Other Taxes and Licenses On Various Activities 6,665,927.00 Contribution 0.2% Financial Transactions For Public Safety 1,986,835,999.00 Mobile Telephony Contribution For Public Safety 79,108,638.00 Mining Contribution For Public Safety 126,553,327.00 Fast Food Contribution For Public Safety 24,285,942.00 Casinos and Slot Machines Contribution For Public Safety 3,279,114.00 Cooperative Sector Contribution For Public Safety 15,883,211.00 Ecotax on Used Vehicle Imports 97,348,713.00 Social Contribution of the Cooperative Sector 61,483,397.00 Tax on Imports 3,434,872,488.00 Land Import 2,007,945,299.00

Maritime Import 1,268,095,079.00 Air and Postal Import 158,832,110.00 Tax on Eventual Benefits and Gambling 9,427,454.00 On National Lottery Draw Prizes 2,561,808.00 On Electronic Lottery Prizes 6,865,646.00 NON-TAX REVENUE 4,109,487,402.00 RATES 1,143,175,415.00 Migration Control 18,800,000.00 Vehicle Inspection 100,000.00 Vehicles with Foreign License Plates 2,900,000.00 Marine Recovery Services 15,300,000.00 Stamps 52,500,000.00 Consular Services 26,300,000.00 Customs Papers 32,600,000.00 Notarial Paper 28,000,000.00 National Flights Protection Service 22,872,841.00 Geological and Shipment Inspections 15,600,000.00 Environmental Monitoring 1,800,000.00 Property Law Registrations 150,000,000.00 Authentications and Translations Service 14,200,000.00 Issuance of Certificates Certifications and Others 77,236,516.00 DESCRIPTION VALUE

Environment Conservation and Safety (Zolitur) 32,466,058.00 Rate for Foreign Calls (US$0.03) 537,000,000.00 Administrative Acts DEI 30,000,000.00 Various Rates 85,500,000.00 RIGHTS 609,277,072.00 Passport Booklets 299,400,000.00 Identification Cards for Sailors 29,700,000.00 Trademark Registration 15,200,000.00 Patent Registration 1,700,000.00 Money Lender Registration 400,000.00 Incorporation of Commercial Companies 100,000.00 National Merchant Marine 11,566,540.00 Driving Licenses 116,500,000.00 Other Licenses 27,050,000.00 Shipping Agent Licenses 200,000.00 Migration Permits and Renewals 50,500,000.00 National Weapons Registry 13,400,000.00 Issuance and Replacement of Plates and Stickers 500,000.00 National Registry of Persons 42,000,000.00 Copyright and Related Rights 300,000.00 Various Rights 760,532.00 DESCRIPTION VALUE

CANONS AND ROYALTIES 917,100,000.00 Concessions and Radio Electric Frequencies 631,900,000.00 Petroleum Exploration Canon 100,000.00 Water Use Canon 3,500,000.00 Airport Concession Canon 266,000,000.00 Territorial Canon 15,600,000.00 FINES 372,719,264.00 Tariff Fines on Imports 53,457,828.00 Consular Fines 100,000.00 Commutations and Judicial Fines 9,236,467.00 Fines for Breach of Contract 300,000.00 Transportation Fines 15,700,000.00 Labor Fines 4,930,000.00 Sanctions and Infractions of CONATEL 1,500,000.00 Police and Traffic Fines 59,000,000.00 Fines for Violation of Migration and Foreigners Law 15,000,000.00 Sanctions under General Mining Law 1,000,000.00 Fines, Surcharges and Interest Application of Tax Code 130,100,000.00 Fines Intellectual Property Law Infractions 200,000.00 Fines and Various Penalties 82,194,969.00 OTHER NON-TAX REVENUE 1,067,215,651.00 DESCRIPTION VALUE

Auction Revenue 2,000,000.00 Customs Adjustments 1,200,000.00 Various Adjustments 6,006,167.00 Dispensation of Edicts 300,000.00 Refund of Prior Fiscal Years 856,300,000.00 Compensation for Loss of Movable Assets 100,000.00 DEI Auctions 778,396.00 Other Non-Tax Revenue 200,531,088.00 SALE OF GOODS AND SERVICES OF THE GENERAL GOVERNMENT 411,448,465.00 SALE OF GOODS 84,290,196.00 Sale of Printed Materials 2,950,000.00 Sale of Agricultural and Livestock Materials and Products 1,729,367.00 Sale of Various Articles and Materials 79,610,829.00 SALE OF SERVICES 327,158,269.00 Other Port Services 900,000.00 Printing 64,494,940.00 Surveillance Services to Private Sector Companies 24,230,000.00 Educational Center Revenue 25,785,839.00 Sale of Various Services Cescco 1,516,264.00 Data Transport HONDUTEL 90,000,000.00 Sale of Various Services 120,231,226.00 PROPERTY INCOME 41,918,000.00 Interest on Public Sector Loans 19,700,000.00 Interest on Loans from Public Financial Institutions 19,500,000.00 Interest on Loans from Non-Financial Public Companies 200,000.00 Interest on Deposits 100,000.00 Interest on Internal Deposits 100,000.00 Interest on Securities and Bonds 16,500,000.00 Interest on Internal Securities and Bonds 15,200,000.00 Commissions on Securities and Bonds 1,300,000.00 DESCRIPTION VALUE

Benefits from Business Investments 200,000.00 Dividends from Shares 200,000.00 Rentals 5,418,000.00 Land and Property Rental 3,400,000.00 Building, Premises and Facilities Rental 1,618,000.00 Equipment Rental 100,000.00 Other Rentals 300,000.00 CURRENT TRANSFERS AND DONATIONS 60,000,000.00 Current Transfers and Donations from Companies 60,000,000.00 Current Transfers and Donations from Public Companies 60,000,000.00 CAPITAL TRANSFERS AND DONATIONS 4,840,000,000.00 Capital Transfers and Donations from the External Sector 4,840,000,000.00 Capital Transfers and Donations from International Organizations 922,013,393.00 Capital Transfers and Donations from Foreign Governments 40,205,848.00 Capital Transfers Millennium Account (Foreign Governments) 115,675,729.00 Debt Relief Concession - Paris Club (Foreign Governments) 1,448,500,000.00 Debt Relief Concession - HIPC (International Organizations) 68,900,000.00 Debt Relief Concession - MDRI (International Organizations) 2,057,880,000.00 Budget Support 186,825,030.00 REDUCTION OF FINANCIAL INVESTMENT 55,400,000.00 Recovery of Long-Term Loans 55,400,000.00 Recovery of Long-Term Loans to Public Financial Institutions 21,800,000.00 Recovery of Long-Term Loans to Local Governments 33,600,000.00 PUBLIC INDEBTEDNESS 17,260,100,000.00 PLACEMENT OF SECURITIES AND BONDS AT LONG TERM 17,260,100,000.00 Placement of Securities and Bonds of Internal Debt at Long Term 17,260,100,000.00 OBTAINING OF LOANS 13,601,900,000.00 OBTAINING OF SECTORAL LOANS AT LONG TERM 8,376,600,000.00 Obtaining of Loans from the External Sector at Long Term 8,376,600,000.00 OBTAINING OF LONG-TERM LOANS 5,225,300,000.00 Obtaining of Loans from the External Sector at Long Term 5,225,300,000.00 TOTAL REVENUE 123,275,615,139.00 DESCRIPTION VALUE

Be approved as the estimation of Income of the Decentralized Administration for the Fiscal Year 2016, by the sum of EIGHTY-THREE THOUSAND, FORTY-FIVE MILLION, EIGHT HUNDRED SEVENTY-EIGHT THOUSAND, NINE HUNDRED SEVENTY-FIVE LEMPIRAS EXACT, (L.83,045,878,975.00) in accordance with the following detail:

CHAPTER II OF THE EXPENDITURES OF THE PUBLIC ADMINISTRATION

The expenses of the Public Administration, Fiscal Year 2016 by Institution, Sectoral Cabinet and Financing Source, are approved by the sum of TWO HUNDRED SIX THOUSAND, THREE HUNDRED TWENTY-ONE MILLION, FOUR HUNDRED NINETY-FOUR THOUSAND, ONE HUNDRED FOURTEEN LEMPIRAS EXACT (L206,321,494,114.00), in accordance with the following detail:

The State Secretary in the Office of Finance is authorized to make the necessary adjustments to the General Budget of Income and Expenditures of the Republic approved for Fiscal Year 2016 with instructions from the Ordinary Budget Commission of the National Congress, through the use of the Budget Modifications Form (FMP-05).

CHAPTER III GENERAL PROVISIONS RATIFIED FROM 2015 FOR 2016

For Fiscal Year 2016, Articles of the General Provisions of the General Budget of Income and Expenditures and of the Decentralized Institutions contained in Legislative Decree No. 140-2014 are ratified, and whose wording is identical to those shown in this Decree in accordance with the following detail: The General Provisions of this Decree that only change from year 2015 to 2016 are considered ratified.

CHAPTER IV GENERAL PROVISIONS FOR THE EXECUTION OF THE GENERAL BUDGET OF INCOME AND EXPENDITURES OF THE REPUBLIC. I. GENERAL STANDARDS FOR BUDGET EXECUTION.

Violations of this Law, when not specifically sanctioned, shall be penalized with fines ranging from 3 minimum salaries to 30 minimum salaries, which shall be imposed by the Attorney General of the Republic to the violators, based on the administrative procedure that for such purposes applies the Superior Court of Accounts, according to its severity, without prejudice to the other administrative, civil and criminal responsibilities that may apply. The amounts from fines shall be deposited in the General Treasury of the Republic and from these revenues shall be allocated to the Superior Court of Accounts and to the Attorney General of the Republic up to twenty percent (20%) for each institution, for the purpose of financing expenses related to the actions of review and compliance with this Law.

The State Secretary in the Office of General Coordination of Government shall monitor the physical and financial execution of institutions, and shall prepare monthly and quarterly reports based on information regarding the execution of programmed goals of public value and production and the financial execution of the Annual Operating Plan-Budget of Public Sector institutions. Such reports shall be sent to the heads of public institutions in order to improve their management; and they shall be published on its internet portal and on the transparency page of said State Secretariat. Likewise, the State Secretary in the Office of General Coordination of Government, through the Presidential Directorate of Results-Based Management, shall conduct the evaluation of results and monitoring of institutional management as well as programs based on an annual evaluation plan. In both cases, the Presidential Directorate of Results-Based Management shall approve the measurement indicators at all levels for the entire National Planning System.

The State Secretary in the Office of General Coordination of Government shall conduct monitoring of sectoral and national management planning, for which purpose it shall prepare quarterly reports on sectoral management, based on information regarding the execution of goals programmed by the Sectoral Cabinets according to progress in fulfilling the overall results of the Strategic Plan of Government; and an annual report on achievements of the overall results of the Strategic Plan of Government 2014-2018, and the indicators of the Plan of the Nation. These reports shall be published on the webpage of the State Secretariat. For purposes of the above-mentioned articles, the information must be mandatorily registered in the Presidential System of Results-Based Management, by Public Sector institutions no later than ten (10) calendar days after the end of the month, and by Sectoral Cabinets no later than ten (10) calendar days after the end of the corresponding quarter; and in the SIAFI, financial information must be registered no later than the last day of the month and physical information five (5) business days once the month ends. Additionally, the State Secretary in the Office of General Coordination of Government shall submit quarterly reports on the results of sectoral and institutional management to the President of the Republic, to the Superior Court of Accounts (TSC), to the Institute for Access to Public Information and to the Budget Commission of the National Congress.

All institutions of Government: Central, Deconcentrated and Decentralized, must submit within the first fifteen (15) days of the month following the end of the quarter, to the State Secretary in the Office of Finance, the quarterly report on their respective physical and financial execution of the Annual Operating Plan and Budget.

These reports must be prepared quarterly and in cumulative form. The monitoring and evaluation of the Annual Operating Plan and Budget shall be conducted by the institutions of Government: Central, Deconcentrated and Decentralized, without exception, in accordance with the Technical Standards and Procedure Manuals of the Subsystems of Budget, Treasury, Accounting, Public Credit and Public Investment approved by the State Secretary in the Office of Finance, based on information mandatorily registered in the Integrated Financial Administration System (SIAFI). Additionally, consideration must be given to information available in the National System of Public Investment in Honduras (SNIPH), in the System for Human Resources Administration (SIARH), Teaching Administration System (SAD), System for Management and Administration of Debt (SIGADE) and the System for Monitoring and Evaluation (SME). When the results obtained are not in accordance with what was programmed, the State Secretary in the Office of Finance is authorized to reduce the amounts programmed in the Monthly Spending Program (PGM), as well as to reduce the pending budget for accrual. Prior to the State Secretary making the decision to reduce such amounts, it shall communicate to the State Secretary in the Office of General Coordination of Government; such measure must ensure that achievement of Government priorities is not affected. The State Secretary in the Office of Finance shall submit no later than fifteen (15) days after receiving the information, the quarterly report on monitoring and evaluation of institutional budget execution in electronic format by delivering a CD (for a total of 12 CDs) to each of the following bodies: National Congress Secretariat (1), State Secretariat in the Office of General Coordination of Government (1), to the Superior Court of Accounts (1), to the Institute for Access to Public Information (1), to the Ordinary Legislative Budget Commission (1) and to the Heads of each of the Parliamentary Groups of the National Congress (7). Likewise, the State Secretary in the Office of Finance shall make said reports available to the general public, publishing them on its internet portal and on the transparency page of said State Secretariat. Quarterly, the Ordinary Legislative Budget Commission together with representations of the different accredited parliamentary groups that make up the National Congress, shall analyze the reports and hold Public Hearings with institutions of Government: Central, Deconcentrated and Decentralized, in order to exercise a control, financial and operational function, for which they shall require from the Office of the Presidency, the State Secretariat in the Office of General Coordination of Government, the State Secretary in the Office of Finance and from the Superior Court of Accounts, the technical support deemed appropriate. Once such reports have been analyzed, the corresponding observations shall be issued. In case of non-compliance, the administrative measures provided for in the General Law of Public Administration shall apply.

Non-compliance with Articles 6, 7, 8 and 10 of this Law, by the official head of State Secretariats, Deconcentrated Bodies and Decentralized Institutions, in addition to the sanctions established in Article 5, shall give rise to censure by the National Congress, of which the President of the Republic shall be informed; likewise, disbursements shall be suspended by the State Secretary in the Office of Finance to the offending institutions until such situation is remedied. II. GENDER FOCUS IN THE GENERAL BUDGET OF THE REPUBLIC

The Gender Budget is a democratic tool of affirmative action in the allocation of resources intended to implement actions to close the gap of discrimination between men and women, ensuring that funds are used equitably from a gender perspective.

The State in order to achieve equality of opportunity between men and women shall promote, in a cross-cutting manner, the application of the II Plan of Equality and Gender Equity in Honduras 2010-2022 (II PIEGH) and the national plan against violence towards women 2014-2022, through the incorporation of the gender perspective in the design, implementation, and evaluation of policies, plans and budgets of the Public Administration. For such purpose, departments and entities must consider the following:

• 1)

  In their Strategic Plan at the level of objectives and results the commitment to reduce substantive inequality gaps between men and women;

• 2)

  In their Annual Operating Plan, contemplate products and activities/works with budget allocations, under the logic of the public value chain and production, that account for concrete actions to achieve gender equality in each public entity;

• 3)

  Generate information disaggregated by gender (sex, ethnicity, age, department, municipalities, among others) through programs, projects, services and activities carried out by public entities; and,

• 4)

  Define and apply indicators that make visible progress in the implementation of the II PIEGH and the National Plan Against Violence Towards Women 2014-2022. The National Women's Institute as the Governing Body of Policies in favor of women's rights and gender equity, from the Cabinet of Development and Social Inclusion must issue the technical and operational guidelines for the formulation of planning and budgets with a gender-women, children and adolescence focus in coordination with the entities that oversee the Planning and Budgeting processes (State Secretariat in the Office of General Coordination of Government through the Presidential Directorate of Strategic Planning, Budget and Investment and the State Secretary in the Office of Finance). The State Secretary in the Office of Finance shall issue Budget Policy Guidelines for the Formulation of Public Sector Budgets, incorporating the consensual contributions of the Governing Body of Gender Policy. The National Women's Institute shall annually apply the gender equity investment index, as an internal mechanism for monitoring and evaluation of public management regarding gender equity. For this purpose, State institutions must submit a report on their budget allocation and execution with a gender perspective. Monitoring shall be conducted bi-annually in coordination with the Gender Equality Commission of the National Congress and Civil Society. Public hearings must be planned by the Budget Commission and in the case related to the situation of gender equity the Gender Commission shall be invited and also women's organizations that in the Commission's judgment it considers appropriate. III. ON REVENUE

All institutions of the Central Administration and the Unit for Registration and Monitoring of Civil Associations (URSAC) that generate or receive revenue, whether from their own activities, eventual revenues or from existing laws, shall deposit in the General Revenue Account that the General Treasury of the Republic maintains in the Central Bank of Honduras the total thereof no later than five (5) days after receipt, using for this purpose the procedures of the Revenue Execution Module of the Integrated Financial Administration System (SIAFI) or the deposit receipt authorized by the State Secretary in the Office of Finance; the same mechanism applies to decentralized institutions that according to some special Law are obligated to remit their own resources in the General Revenue Account of the General Treasury of the Republic. The State Secretary in the Office of Finance may authorize up to fifty percent (50%) of net revenue generated by activities of its own nature that refer to the sale of goods and services, to be used by such departments, provided that the collection thereof is demonstrated. Excepted from the provisions of the preceding paragraph are the institutions described below; to which the following percentages shall be authorized:

• 1)

  The State Secretariats: Foreign Relations, Security and National Defense; to the Attorney General of the Republic; to which shall be assigned up to eighty percent (80%) of revenue from the various activities carried out by their departments, and to the National Institute for Forest Development and Conservation, Protected Areas and Wildlife and to the Honduran Institute of Geology and Mines up to ninety percent (90%), respectively. For the use of these resources, the State Secretariats in the Offices of Security and National Defense, shall present to the State Secretary in the Office of Finance, the Budget and Spending Plan, which must include prevention and rehabilitation programs, and shall also inform the National Congress. Revenue from weapons registration received by the State Secretary in the Office of Security is excepted, in accordance with the provisions of Article 4 of Legislative Decree No. 187-2004, which establishes one hundred percent (100%) of revenue from this concept. To the State Secretary in the Offices of Energy, Natural Resources, Environment and Mines, of the resources it receives for environmental rates, canons, certifications or certificates and any other revenue related to its competencies, to which shall be assigned ninety percent (90%); To the Directorate of Science and Agricultural Technology of the resources it receives from revenue from the sale of goods and services it provides to the agricultural sector, shall be assigned up to ninety percent (90%).

• 2)

  To the Honduran Civil Aeronautics Agency, in accordance with Article 101 of its Law, shall be assigned up to eighty percent (80%) of resources it generates from the collection of Civil Aviation Security Services, which must be invested in operational expenses. The State Secretary in the Office of Finance must provide its connectivity to the Integrated Financial Administration System (SIAFI) to operate directly;

• 3)

  From the collections made by the Executive Directorate of Revenue (DEI), for the concept of data transport services of the Honduran Telecommunications Company (HONDUTEL) shall be transferred seventy percent (70%) as own resources, which must be used to cover the cost of services provided by the Honduran Telecommunications Company (HONDUTEL) for data transport and internet; as well as the updating, maintenance and permanent sustainability of the new computer platform and the existing one, for the optimal functioning in its entirety of the Automated System of Customs Revenue of Honduras (SARAH). The remaining thirty percent (30%) shall be assigned for administrative expenses of the DEI and must report on administrative expenses of these resources to the General Directorate of Budget of the State Secretary in the Office of Finance;

• 4)

  Revenue received by the National Registry of Persons (RNP) for the concept of services it provides, shall be incorporated at one hundred percent (100%) prior verification of the existence of corresponding deposits in the Integrated Financial Administration System (SIAFI), by the State Secretary in the Office of Finance, through the General Directorate of Budget;

• 5)

  To the National Center for Education for Work (CENET); shall be assigned one hundred percent (100%) of own resources generated and collected;

• 6)

  To the Free Tourism Zone of the Bay Islands (ZOLITUR) shall be assigned one hundred percent (100%) of the fees they collect for services they provide;

• 7)

  To the National Agricultural Health Service (SENASA) shall be assigned one hundred percent (100%) of the fees they collect for services they provide.

• 8)

  Revenue received by the State Secretary in the Offices of Infrastructure and Public Services (INSEP) from the sale of electrical energy to the National Company of Electrical Energy (ENEE), through the operation of the Nacaome Hydroelectric Plant, shall be deposited in the General Treasury of the Republic and from these shall be incorporated up to fifty percent (50%) designated exclusively to cover operating and maintenance expenses of said Hydroelectric Plant;

• 9)

  Revenue received by the Electrical Energy Regulatory Commission (CREE), must be from the application of a rate of point twenty-five percent (0.25%) of the total amount invoiced by the Distribution Company of Electrical Energy or the National Company of Electrical Energy (ENEE) in the month, prior to the previous month; must be available to the CREE up to ONE HUNDRED PERCENT (100%), deducting therefrom only collection costs in case there are any; the application of this percentage must not be transferred to the billing of users.

• 10)

  Revenue received by the Commission for the Defense and Promotion of Competition (CDPC), for the concept of Economic Concentration Verification Rate, shall be assigned at ninety percent (90%); and,

• 11)

  Revenue received for the services provided by the National Telecommunications Commission (CONATEL), once the collection has exceeded the goal provided for in the General Budget of Income and Expenditures of the Republic shall be assigned fifty percent (50%) of the surplus of amounts collected. For the State Secretariat in the Office of Finance to authorize the incorporation into the budget of these values, CONATEL must present the detail of resources obtained. All institutions of the Central Administration that have received the percentage of own generated revenue referred to in the preceding paragraphs and that do not use it in the Fiscal Year must return the surplus values to the General Treasury of the Republic, no later than the first five (5) business days after the end of the Fiscal Year. In properly justified cases, the State Secretary in the Office of Finance, prior communication to the State Secretary in the Office of General Coordination of Government, may authorize the incorporation of resources received in this Fiscal Year, incorporated and not executed in the preceding period. For purposes of incorporation of own revenue generated and/or received by institutions of the Central Administration, these revenues shall be deducted the values collected by the Banking System for collection service fees. The F01s that are generated against these resources must be prioritized immediately by the General Treasury of the Republic.

The Primary Health Care Units (UAPS), the Comprehensive Health Centers (CIS), the Polyclinics, the Hospitals and the Department of Monitoring of Health Standards dependent on the General Directorate of Monitoring of Health Standards, all dependent on the State Secretary in the Office of Health, may use their recovered revenue to cover operational expenses and must also submit execution reports of these funds as stipulated in the Manual and Regulations for use of Recovered Funds.

The matter relative to these recovered funds must be properly regulated and audited. Likewise, official educational establishments and other departments of this State Secretariat that generate resources may use own revenue, in accordance with that established in the Regulations and procedures that for that purpose were approved by the State Secretariats of Health and Education in coordination with the State Secretary in the Office of Finance, in order to register with timeliness and proper form the own revenue received and expenses incurred financed with such revenue, if the corresponding registration is not made they must adjust to the procedure established for all other institutions; likewise, they must execute their payments via SIAFI. This provision shall also be applicable to the Military Hospital, the University of Defense of Honduras and to the Military Industry of the Armed Forces, for which they must register in the Integrated Financial Administration System (SIAFI), both revenue and expenses. Budget execution reports must reflect the origin and destination of these resources. The Internal Audit of each of the institutions in reference shall ensure compliance with this provision, in keeping with that established in Article 119 of the Organic Law of the Budget. The State Secretary in the Office of Finance through the General Comptroller of the Republic must inform the Superior Court of Accounts and the Ordinary Budget Commission of the National Congress of non-compliance with this provision.

Revenue from rates, surcharges, authorized licenses or services provided by the National Telecommunications Commission (CONATEL) shall be paid to the General Treasury of the Republic or to any Bank of the National Financial System authorized. Revenue that the National Telecommunications Commission (CONATEL) receives abroad from the issuance of Radio Licenses paid by ship or vessel owners and lessees as well as revenue from the registration in the Registry of Ships and from the issuance of the Navigation Patent collected abroad by the General Directorate of National Merchant Marine must be registered in the Revenue Execution Module of the Integrated Financial Administration System (SIAFI) through direct internet access and deposited in Correspondent Banks abroad, who shall transfer such values to the Account established by the General Treasury of the Republic, and these collection agents shall inform said Treasury no later than two (2) business days after their collection.

Revenue received from actions executed by the Attorney General of the Republic (PGR) before Courts or Tribunals resulting from the operations carried out by the Superior Court of Accounts (TSC), must be deposited in the General Treasury of the Republic in accordance with that established in Article 11 of this Law. From such revenue may be distributed to the Superior Court of Accounts (TSC) and to the Attorney General of the Republic (PGR) the percentage established in Article 34 of the Law for Organization of Public Finance, Control of Exemptions and Anti-Tax Evasion Measures, Decree No. 278-2013. Revenue received from the intervention of the Attorney General of the Republic (PGR), at the request of other Institutions, must be deposited in the single account of the General Treasury of the Republic up to ten percent (10%) of such revenue. In the case of sanctions imposed by the State Secretary in the Offices of Labor and Social Security and in which the Attorney General of the Republic (PGR) intervenes, to companies that commit infractions, said Office shall be assigned ninety percent (90%) of the percentage established in the preceding paragraph.

All institutions of the Public Administration to which a percentage is assigned based on collections from own revenue must present to the General Directorate of Budget (DGP) the supporting documentation (TGR-1 payment receipt) within thirty (30) calendar days of the month following the month in which such revenue was generated, in order that they may be authorized for their execution.

Social Security Institutions and financial institutions that generate their own income and have their own assets, with administrative, budgetary, technical and financial independence from the public treasury, may allocate and incorporate surpluses to the budget of income and expenses with prior authorization from their Corporate Governance and invest the corresponding resources in securities with high safety, profitability and liquidity. Likewise, additional income generated in accordance with what is established in the preceding paragraph may be allocated to the payment of operating expenses related to the benefits and services that Social Security institutes and Financial Institutions provide in accordance with their own laws and observing compliance with the budgetary rules contained in this Law. The aforementioned institutions must notify the actions taken to the State Secretariat in the Office of Finance for purposes of monitoring and control. The National Commission of Banks and Insurance (CNBS) through its specialized technical body must supervise the correct annual settlement of approved budgets.

When the Current Income of the Central Administration exceeds the amounts estimated in the General Budget of Income and Expenses of the Republic, the Executive Branch is authorized to incorporate surpluses periodically into the General Budget of Income and Expenses of the Republic through the budgetary expansion procedure, by means of the State Secretariat in the Office of Finance. Such resources may not be allocated to increase the budget of institutions that receive a percentage established by Law, nor to allocate Wages and Salaries of permanent or temporary personnel, nor for the hiring of consultants. These resources and those generated by the recovery of loans granted by forced liquidation operations of Financial System Institutions shall be allocated to reduce the use of internal or external credit; cancel the balance of debt that has less favorable conditions and the payment of Debt Service. The same treatment shall be given to recoveries and balances of funds granted for payment to investors and/or depositors who were harmed by such forced liquidation and these shall be allocated to meet commitments derived from the same purpose. All the values mentioned above shall be incorporated into the Institution "449 Financial Services of the Central Administration".

For purposes of this Law, Net Income is understood as the result of subtracting from Total Income the following items:

• 1)

  The amount of loans received from both internal and external sources;

• 2)

  Internal and/or external transfers and donations;

• 3)

  Loan recovery;

• 4)

  Values generated by the application of Legislative Decree No. 105-2011 of June 23, 2011, amended by Decree No. 166-2011 of September 6, 2011 (Public Safety Law);

• 5)

  Amounts collected as own resources;

• 6)

  Values paid to the national banking system for collection service;

• 7)

  Tax refunds;

• 8)

  Refunds for overpayments made in previous Fiscal Years;

• 9)

  The applicability of Credit Notes; and,

• 10)

  The collection of 4.0% of Tourist Rate intended exclusively for the IHT.

Transfers that must be granted to the different institutions of the Public Sector based on a percentage established by Law on Income shall be made in accordance with the programming of the General Treasury of the Republic and to the extent that the corresponding collection is made, respecting the Constitution of the Republic, special Laws, agreements and covenants.

All Transfers in favor of the different institutions of the Public Sector that appear approved in the General Budget of Income and Expenses of the Republic, their granting shall be subject to the value collected in the present fiscal year, independently of the approved value as established in the preceding Article, this condition is extensive for transfers made to institutions of the private sector, and that are financed with resources from the National Treasury. In this regard, the State Secretariat in the Office of Finance shall notify the values that will not be granted so that the institutions carry out the reprogramming of their POA and Budget, both in the Integrated Financial Administration System (SIAFI) and in the Presidential System of Management by Results.

In order to ensure progress in the process of operational decentralization in the execution of the respective budgets of all regional departments and all hospitals of the Health Office, their respective allocations approved in the General Budget of Income and Expenses of the Republic may not be reduced, as well as the resources that are incorporated from any other source. With the exception of the budgetary allocation for medicines since NINETY PERCENT (90%) shall be allocated exclusively to finance purchases of Pharmaceutical Products for the Central Warehouse of medicines through the trust for medicine purchases, excluding from this mechanism the budgetary item for medicines of the University School Hospital, the San Lorenzo Hospital and others that complete their decentralization process. The remaining TEN PERCENT (10%) shall be purchased by each Hospital and Regional Department of the Health Secretariat according to the budgetary allocation.

With the objective of guaranteeing and optimizing the resources allocated to the Health Secretariat for the payment of transfers to decentralized health service managers, budgetary modifications will be allowed from one beneficiary to another, solely and exclusively those that provide health services at the first level of care (regional departments).

Budgetary allocations intended for the payment of public services must be used solely to cover expenses incurred for these items, consequently, it is forbidden to make transfers to cover commitments of a different purpose. Quarterly, the Administrative Managements or their equivalent in the Institutions of the Central, Deconcentrated and Decentralized Sector, shall send simultaneously to the National Electricity Company (ENEE), Honduran Telecommunications Company (HONDUTEL), National Autonomous Service of Aqueducts and Sewerage (SANAA) and to the General Directorate of Decentralized Institutions of the Finance Secretariat evidence of the budgetary execution of these allocations. The Internal Audit of each of the aforementioned institutions shall ensure compliance with this provision, in accordance with what is established in Article 119 of the Organic Budget Law.

All government branches: Central, Deconcentrated and Decentralized, shall allocate and execute monthly based on billing notices and charged against their respective Budget, the services provided by the Honduran Telecommunications Company (HONDUTEL), the National Autonomous Service of Aqueducts and Sewerage (SANAA), the National Electricity Company (ENEE) or any other public or private institution that provides these services. No Public institution may exempt itself from such obligations; in case of non-compliance the Administrative Managers or whoever performs their duties shall be jointly and severally liable for the debts, charges and interest incurred, without prejudice to civil, administrative and criminal actions. The public service institutions mentioned in the preceding paragraph are obligated to provide to the user departments of the Government: Central, Deconcentrated and Decentralized, the detail of the billing for services provided during the period covered by the respective payment notices, they shall also make the corresponding credits in the billing notices when the State has used the compensation mechanism to settle debts between public service providers and public institutions. All institutions shall conduct a review of electric meters, water meters and telephone numbers in order to determine that the values charged correspond effectively to their institution, any payment made improperly shall be the personal responsibility of the Administrative Manager or whoever performs this function in the institution. Public utility companies shall provide all necessary cooperation to conduct this review.

Any additional requirement for resources from the National Treasury source (11) by the Institutions of the Central, Deconcentrated and Decentralized Administration, aimed at satisfying unavoidable needs not provided for in the Objectives and Results of the Annual Operating Plan contained in the approved Budget, must be addressed with resources from their own budget through a physical and financial reprogramming of their objectives and results in accordance with the Technical Standards of the Budget Subsystem.

The institutions of the Central, Deconcentrated and Decentralized Administration are authorized to sell scrap derived from equipment, machinery, cars in abandonment and that are out of circulation, only to replace them with the income generated by said sale without generating any burden to the Budget of the Republic. The State Secretariat in the Office of Finance shall issue regulations for the expedited sale procedure, each Institution must inform the Superior Audit Court, THIRTY (30) days after the respective sales are made.

Officials and employees of the Public Administration (State Secretariats, Deconcentrated Entities, other attached institutions and Decentralized Institutions), to whom Per Diem and Other Travel Expenses are granted outside the country, must be subject to the express authorization of the President of the Republic or of the State Secretary to whom this function is delegated; and they must settle them in accordance with the determination of categories, zones, periods of missions and limits for per diem that are contained in the Regulations for Per Diem and Other Travel Expenses for Officials and Employees of the Executive Branch. The supporting documentation shall be submitted for review by the Administrative Management or its equivalent of each institution and in case falsifications or alterations are found in the same, the total return of the amount consigned in the altered document or documents must be made, within a period not exceeding five (5) business days after notification, without prejudice to the administrative and criminal responsibility incurred.

Refunds in cash of surpluses of per diem and other travel expenses, must be deposited at the General Treasury of the Republic or Institutional Treasury, accompanied by the respective deposit receipt in the Travel Settlement. If a trip is not made, the value of the per diem and other expenses that have been granted shall be returned, within a period not exceeding five (5) business days after receipt. Under no circumstance may these resources be used for other purposes.

Representation Expenses within and outside the country are the amounts determined for non-liquidable expenses, inherent to the exercise of their functions, which are granted to officials according to their position and responsibilities and shall be determined by the President of the Republic for the Central and Deconcentrated Administration or by the Superior Directing Body when it comes to Decentralized Administration. These expenses are different from those referred to in the Regulations for Per Diem and Other Travel Expenses for Officials and Employees of the Executive Branch. Such representation expenses shall be granted in the following amounts:

• 1)

  to the President of the Republic and State Secretaries, Twenty Thousand Lempiras (L.20,000.00);

• 2)

  to State Undersecretaries, Fifteen Thousand Lempiras (L.15,000.00); and,

• 3)

  to the heads of Decentralized Institutions and Deconcentrated Bodies, Fifteen Thousand Lempiras (L.15,000.00), provided that these officials receive a monthly salary equal to or less than that of State Secretaries. For other officials of the Executive Branch, authorization of representation expenses shall be authorized by the President of the Republic and its validity shall be only for the present Fiscal Year. The budgetary allocations of the Object Representation Expenses Abroad that appear in the Activities Diplomatic Representations and Consular Representations, of the External Promotion and International Management Program of the Foreign Relations Office, shall serve exclusively to cover expenses directly linked to the operation of Embassies and Consulates Abroad.

The spending allocations contained in the Security Office in Program 11 Criminal Investigation Services, Activities: 02 Criminal Investigation Services, 03 Organized Crime Investigation Services, 04 Investigation, Protection and Apprehension in Crimes Against Minors; Program 12 Police Prevention and Protection Services, Activities: 02 Preventive Services and Police Interventions, 03 Care for Special Programs, 04 Police Interventions, 05 Investigation, Protection and Apprehension in Crimes Against the Life of Women and femicides; Program 14 Police Services in Road Safety, Activity 02 Road Safety Services; Program 15 Strategic Interinstitutional Security Services, Activities 02 Interinstitutional Prevention Services and 03 Interinstitutional Investigation Services. Regarding expenses incurred for the benefit of State Security, based on what is established in Article 17 of Legislative Decree No. 170-2006, the information derived from the budgetary allocations corresponding to Institutions 1, 20 and with respect to Institution 30, Program 99, Sub-Program 00, Project 00, Activity Work 01 and Object of Expense 99100 is classified as reserved; in the National Defense Office, Programs 11 Defense of National Sovereignty and Territorial Integrity in Terrestrial Space, Activity 02 Safeguarding of National Sovereignty and Territorial Integrity in Terrestrial Space, 03 Maintenance of Operational Organization and Logistical Equipment; Program 12 Defense of National Sovereignty and Territorial Integrity in Airspace, Activity 02 Safeguarding of National Sovereignty and Territorial Integrity in Airspace, 03 Maintenance of Operational Organization and Logistical Equipment; Program 13 Defense of National Sovereignty and Territorial Integrity in Maritime Space, Activity 02 Safeguarding of National Sovereignty and Territorial Integrity in Maritime Space, 03 Maintenance of Operational Organization and Logistical Equipment; Program 14 Superior Technical Military Body of Advising, Planning, Coordination and Supervision, Activity 07 Operations Supporting Internal Security and Maintenance of Public Order and in the Direction of Investigation and Evaluation of the Police Career Program 11 Investigation of Unlawful Acts Committed by Members of the Police Career, Activities 02 Investigation of Crimes, 03 Investigation of Financial and Patrimonial Crimes 04 Intelligence Services; Program 12 Confidence Evaluation System, Activity 02 System for Application of Confidence Tests; National Penitentiary Institute, Program 11 Treatment and Penitentiary Management, Activity 02 Safeguarding and Security of those deprived of liberty, which due to the nature of their functions require an expedited administrative procedure, shall be transferred to bank accounts at the Central Bank of Honduras that will be opened for each of the mentioned programmatic categories of such institutions, whose handling shall be in charge of the Administrative Manager of the respective Office, based on the disbursement and execution plan that they present. They must present reports of their execution to the President of the Republic, to the President of the National Congress and to the National Defense and Security Commissions of the National Congress. It is understood that the resources handled by this mechanism must be annually settled and the surpluses deposited in the General Treasury of the Republic within five (5) business days after the end of the Fiscal Year. The following are excepted from the above: the spending allocations contained in the Programs and Activities mentioned, which refer to Transfers, Leases, Insurance, Employer Contributions to Social Security and Welfare Institutions, Payment of Thirteenth and Fourteenth Month Salary and Contracting of Public Works, Public Services and Consulting that shall be carried out following the spending stages called: Pre-commitment, Commitment, Accrued.

The exception referred to in the first paragraph of Article 56 of the Law of the Central Bank of Honduras, regarding the opening of accounts for payments of lesser amounts, which may not be deposited in said banking entity, may be managed in the private banking system up to an amount of FIFTY THOUSAND LEMPIRAS (L.50,000.00), for those institutions whose budget is less than or equal to ONE MILLION LEMPIRAS (L.1,000,000.00); Institutions with an approved budget greater than ONE MILLION LEMPIRAS (L.1,000,000.00), their deposits shall be up to an amount of ONE HUNDRED THOUSAND LEMPIRAS (L.100,000.00). In both cases the funds must be deposited in a single account per Institution and in a single banking institution. To ensure compliance with this provision, the Central Bank of Honduras is authorized to conduct the corresponding annual reviews of the amounts of lesser sums that, in accordance with this Law, are authorized to be managed by Public Sector institutions in the national financial system. In addition to the foregoing, the interest generated by these accounts must be remitted to the General Treasury of the Republic no later than two (2) days after their credit. This provision is applicable to all Public Sector Institutions, Projects, and Official and Semi-Official Entities that receive funds from the National Treasury, Loans, and Donations. IV. BUDGETARY MODIFICATIONS

For the purpose of avoiding overdrafts in approved budgetary allocations; all institutions of the Government: Central, Deconcentrated, and Decentralized, when so required, shall make the necessary budgetary modifications prior to the execution of expenses, and no institution shall make payment commitments without counting on the respective budgetary allocation.

Without prejudice to what is established in Article 36 of the Organic Budget Law, for the purpose of expediting the incorporation of external resources from donations or loans previously approved by the Legislative Power, the Form FMP-05 denominated "Budgetary Modification Document" generated by SIAFI, shall serve in place of an Internal Resolution and shall be added to the General Budget of Income and Expenses of the Republic for Fiscal Year 2016 provided that the national counterpart is available, when applicable. In the case of external financing resources that require budgetary incorporation, they must previously have a Favorable Opinion from the State Department in charge of Finance, SEFIN.

For the purpose of maintaining sound administration, at the time of making a budgetary modification, the respective Annual Operating Plan (POA) must be readjusted in cases that correspond, the information in the Presidential Management by Results System of the State Department of General Coordination of Government, the Monthly Spending Programming (PGM), the Quarterly Spending Quota (CGT), and the Annual Plan of Purchases and Contracting.

In addition to what is established in the Technical Standards of the Budget Subsystem, Agreement No. 1341, Article 25, institutions of the Central, Deconcentrated, and Decentralized Government are authorized to effect transfers or shifts of budgetary credits between items of the groups Non-Personal Services and Materials and Supplies between different programs of the same institution, with the exceptions of basic services (Water, Energy, and Fixed Telephony) established in this Law.

In order to achieve sound administration of resources, a maximum of ten (10) budgetary modifications per quarter is restricted, derived from internal transfers carried out by Public Sector institutions. The transfers made by the State Department in charge of Finance are excepted from the foregoing, following analysis with a Favorable Opinion or Resolution in response to requests submitted by Public Sector institutions. V. TREASURY OPERATIONS

All payments from the Central Administration in favor of or by means of the Central Bank of Honduras shall be made through the respective manual or electronic document issued by the State Department in charge of Finance. The Central Bank of Honduras shall not effect any debit from the accounts in the name of the General Treasury of the Republic and of the State Department in charge of Finance that do not have the express authorization of this Department, except as agreed in agreements and/or contracts executed prior to this provision. For these exceptional cases the Central Bank of Honduras must:

• 1)

  In Direct Internal Public Debt, deliver to the State Department in charge of Finance, through the General Direction of Public Credit, copies of the documents that support the amounts paid for amortizations, interest, and commissions, disaggregated in accordance with the requirements of said General Direction, each time the operation is generated, for purposes of registration and control of indebtedness;

• 2)

  In loans granted to Public Sector Institutions that have the guarantee, pledge, or collateral granted based on Article 78 of the Organic Budget Law, notify the State Department in charge of Finance, through the General Direction of Public Credit of the following situations: a) With twenty (20) business days in advance, the insufficiency or non-availability of funds in the accounts of the debtor institution, for purposes of cash flow programming of the Single Account; and, b) With advance notice of seven (7) business days, the failure to present the payment letter for debt service by the debtor Institution, as well as the availability of funds in the banking accounts of the same.

• 3)

  If there is availability in the accounts and the payment process has not been initiated by the debtor institution, the Central Bank of Honduras must comply with the instruction of the State Department in charge of Finance, debiting the banking accounts of the debtor institution to make the payment directly; and,

• 4)

  Immediately notify the General Treasury of the Republic and the General Direction of Public Credit of each debit made in application of this Article, detailing the concept and basis for the same, in order to proceed with its corresponding verification.

In order to obtain timely information related to funds deposited by Public Sector Institutions in accounts of the Private Banking System (National and Foreign in applicable cases) including Trusts and fixed-term deposits, in consonance with what is ordered in numerals 7) and 8) of Article 94 of the Organic Budget Law, banking institutions shall send daily to the General Treasury of the Republic, bank statements in electronic format, related to the movement of such accounts, for the process of automatic bank reconciliation in the Integrated Financial Administration System (SIAFI), which must include the executing units and projects financed with external funds.

For disbursements that the State makes in foreign currency, Payment Orders shall be generated with their equivalent in national currency using the exchange rate of the day established by the Central Bank of Honduras. The exchange differentials that derive from these operations shall be generated and recorded automatically in the Integrated Financial Administration System (SIAFI) through Form F-01 in the same previously affected allocations. Any differential in favor of the State must be credited to the originally affected spending structure and must generate the corresponding F-07 reversal form.

All amounts that Institutions of the Central Administration have received in advance, as own resources and/or transfers and any other concept of income, that were not used at the end of the Fiscal Year, must be remitted to the General Treasury of the Republic within five (5) business days after the end thereof. This provision is also applicable to public and private institutions that receive resources from the Central Administration. Likewise, these latter must present the settlement of expenses incurred.

Leave suspended Article 7 of the Special Law for the Simplification of Public Infrastructure Investment Procedures, contained in Legislative Decree No. 58-2011 dated May 18, 2011.

Once the General Budget of the Republic for fiscal year 2016 is approved by the National Congress, all institutions of the Central, Decentralized, and Deconcentrated Government, through their Executing Units, must enter their original Monthly Spending Programming (PGM) document in SIAFI, based on the planning of their expenses from January to December, this provision is applicable for source 11 "National Treasury". For the execution of the Budget, institutions of the Central and Deconcentrated Government must relate the Quarterly Spending Quota (CGT) assigned by the General Treasury of the Republic with the Monthly Spending Programming (PGM). VI. PUBLIC CREDIT OPERATIONS

The Executive Power, by means of the State Department in charge of Finance, during Fiscal Year 2016, if it does not have the necessary liquidity, may pay through bonds the quotas that the State as employer must contribute to the social security institutes up to a maximum of FIFTY PERCENT (50%); as well as a maximum of TWENTY PERCENT (20%) of the transfer that corresponds to be made to the municipal corporations of the country, excepting municipal corporations C and D. Likewise, the State Department in charge of Finance is authorized to pay through the issuance of bonds, the outstanding employer contribution obligations from prior fiscal years.

The State Department in charge of Finance through the General Direction of Public Credit shall prepare the Regulation that defines the characteristics, terms, and conditions of the Issuance of Government Securities authorized for Fiscal Year 2016.

In line with the Public Debt Policy document for the Period 2016-2019, in compliance with the agreements negotiated with the International Cooperating Community, in accordance with Monetary Policy and for the purpose of maintaining a level of public debt in conditions of financial stability and sustainable in the medium and long term, a maximum ceiling for public debt of forty-eight point eight percent (48.8%) in relation to GDP is established.

The Ministry of State in the Office of Finance and the Ministry of General Government Coordination shall work jointly to ensure that all resources from Non-Reimbursable External Cooperation received by institutions in the public sector shall be incorporated into the General Budget of Income and Expenditures of the Republic and into the Integrated Financial Administration System (SIAFI) and in the Presidential System of Management by Results, for their respective monitoring.

The Ministry of State in the Office of Finance may conduct swap or refinancing operations of existing bonds or bonds at maturity for other bonds, with the purpose of minimizing risk and improving the profile of the debt portfolio. Swaps represent simultaneous buying and selling operations of Government securities and as such shall be registered in the Debt Management and Administration System (SIGADE) and in the Financial Administration System (SIAFI), as a principal payment and an issuance of a new bond, provided that the operation involves the purchase of securities with maturity within the current fiscal period. In the case of swaps of securities with maturity dates in years following the current year, these shall not affect the budgetary ceiling for internal public debt authorized in the General Budget of the Republic for the present year; however, accrued interest that is capitalized and the nominal increase that exists in the debt as part of the swap process shall count against the authorized ceiling.

The Ministry of State in the Office of Finance is authorized to proceed with the placement of available balances from the issuance of bonds authorized to finance the expenses of Fiscal Year 2015, which may be in national or foreign currency. The resources obtained through this concept shall be intended to honor obligations arising at the close of Fiscal Year 2015.

In order to guarantee the correct application of funds from external loans or donations, the persons authorized to request disbursements of these resources shall be only the Heads of the Public Sector Institutions. Administrative procedures may be carried out by Directors, Coordinators, Administrative and/or Financial Managers of the Program/Project. In order to guarantee effective execution of the budgetary allocation, all disbursements, whether in cash or direct payment, shall be channeled and authorized following the directives and authorizations from the Ministry of State in the Office of Finance through the General Directorate of Public Credit. Persons responsible for the administration of these resources who incur in the authorization of ineligible expenses within the agreement shall be jointly liable for such authorizations, without prejudice to civil, criminal, and administrative actions. Programs and projects that present findings, such as ineligible expenses in their audited financial statements, shall suspend requests for disbursements before the Financing Organization, until correcting their financial execution.

Bonds acquired by institutions in the Public Sector including State Enterprises may be traded in the primary securities market or secondary market without intermediaries when they are between institutions of the same Public Sector and the operation is carried out for investment purposes of their own portfolio, without further speculative purposes in the open market; likewise, it is explicitly recognized that operations of financial securities in the open market vary in prices according to market conditions on the date of operation, whereby the price of sale or purchase of bonds may be at par, below par, or above par, fluctuating according to the specific market conditions on the date of negotiation.

In the Debt Service are included resources intended to cover the payment of employer contributions, teacher contributions, and other personal obligations owed from prior years, acquired by the State, for the benefit of teachers of the Honduran Community Education Program (PROHECO), which shall be paid to the National Teachers' Pension Institute (INPREMA). Such payment shall preferably be through the issuance of Government Securities, which may be carried out no later than September 30, 2016, corresponding to the fifth installment agreed upon in the Inter-institutional Agreement between the Ministry of State in the Office of Finance and the National Teachers' Pension Institute, which shall be charged to the amount authorized for the issuance of securities of the year 2016.

Without prejudice to what is provided in Article 68 of Decree 17-2010 of March 28, 2010 containing the Law for Strengthening Income, Social Equity, and Rationalization of Public Expenditure, and for purposes of contracting financing that is deemed necessary and for which no financial source exists that allows for the required weighted concessionality; non-concessional debt may be contracted, provided that the total outstanding external debt portfolio maintains a minimum weighted concessionality of twenty-five percent (25%), preferably new borrowing should be contracted in currencies in which the country's international reserves are constituted, a provision that is consistent with the Public Debt Policy Guidelines that will govern for 2016-2019.

Public debt authorized through the issuance of bonds and the obtaining of loans is fungible in nature and therefore may be redistributed when financial and market conditions exist that foster such fungibility from one source to another, with respect to the domestic or external market, currency type, terms, and other conditions that impact financing, provided that it does not exceed the amount authorized in Article 1 of this Law. The Ministry of State in the Office of Finance through the General Directorate of Public Credit may redistribute, reassign, or reorient the assigned limits of funds from external credits, which shall ensure that such measure is consistent and feasible with Government priorities.

Net credit from the placement of securities and bonds conducted by the Ministry of State in the Office of Finance shall not exceed the amount authorized in Article 1 of this Law. Net credit from internal financing shall be understood as the amount authorized to raise or negotiate through the placement of government securities in public auction, refinancing, or direct negotiations, excluding amounts for accrued interest and discounts granted. Natural fluctuations in exchange rates or inflation shall be considered once on each date of placement of securities in foreign currency (or denominated) and indexed to inflation.

Municipal Corporations that request an opinion from the General Directorate of Public Credit (DGCP), through the Ministry of State in the Office of Finance for obtaining loans from national and/or international entities in order to address municipal investment plans and projects, shall submit documentation that certifies their solvency, based on established requirements; likewise, budgetary and financial information must be obligatorily available in the Integrated Municipal Administration System (SAMI). Municipal Corporations that plan to acquire loans from National and/or International entities shall implement the SAMI tool as the primary source of information and guarantee the adequate execution of such funds. Municipal Corporations at the time of requesting financing from Private Banking must have an opinion certifying the viability of financing from an external Auditing Firm. Duly qualified and certified by the National Banking and Insurance Commission (CNBS), provided that such financing exceeds Twenty Million Lempiras (L.20,000,000.00). The opinion on the level of indebtedness and municipal payment capacity issued by the DGCP shall comply with the established indicators and shall not constitute a guarantee on the part of the Central Government; this provision is supplementary to that established in Article 82, Numeral 4 of the Organic Budget Law, Article 19, Numeral 3 of the Technical Standards of the Public Credit System.

Institutions that execute programs and projects financed with external funds through the modality of direct payments or direct charges, prior to requesting disbursements from the International Organization, shall have the budgetary provision in fiscal year 2016, for which the Ministry of State in the Office of Finance, through the General Directorate of Public Credit shall authorize such management. Once the direct payment or direct charge is made, the executing Institution shall impute its budgetary execution in the Integrated Financial Administration System (SIAFI), no later than FIFTEEN (15) days after being made; non-compliance with this provision shall give rise to the Ministry of State in the Office of Finance to proceed with the disabling of Expenditure Execution Users in SIAFI, which shall be coordinated by the General Directorates of Public Credit, Public Investment, and Budget. All new external debt contracting, as of the entry into force of this Law, shall comply with what is established in current national legislation and in the Single Cash accounting principles, which indicate that all public sector funds must be deposited in the Single Account of the Treasury General of the Republic, so that the income and discharge of an obligation is registered; thus prohibiting the modality of direct payments or direct charges.

The National Electrical Energy Company (ENEE) may conduct operations for the management of existing bond liabilities, with the purpose of minimizing risk and improving the profile of the debt portfolio. Liability management operations conducted by the National Electrical Energy Company (ENEE) shall not count against its authorized budgetary ceiling for public debt for the present year and may be conducted through swap operations, refinancing, early redemption of securities, contracting loans, or other legally viable financial mechanisms, and may access the domestic market.

The Ministry of State in the Office of Finance is authorized to, if it deems it appropriate, issue in the international capital market Sovereign Bonds of the Republic of Honduras charged to the amount of borrowing authorized in the present budget, under the modality of reopening or new issuance and under the financial conditions prevailing in the market at the time of negotiation. The Ministry of State in the Office of Finance reserves the right to choose the timing of carrying out the operation, in accordance with resource needs and market conditions. Likewise, the Ministry of State in the Office of Finance is empowered to directly contract the following: services of one or more investment bank(s) specialized in the structuring, marketing, pricing, and placement of sovereign bonds, brokerage firms, advisors, financial and/or legal advisory firms, companies for printing of the offer circular, the bank or banks providing fiscal agent, registrar, and paying agent services, legal registration entities, securities markets that will list the operation, and investment rating firms, for a maximum term equal to the maturity of the bonds and in accordance with market practices. Furthermore, it is authorized to identify the necessary resources for the payment of such services. The principal and interest of the Sovereign Bond, payments for services provided by brokerage firms, advisors, and financial and/or legal advisory firms, companies for printing the offer circular, banks providing fiscal agent, registrar, and paying agent services, legal registration entities, securities markets that will list the operation, and investment rating firms shall be exempt from all classes of taxes, rights, fees, surcharges, municipal fees, contributions, assessments, fees, or public, governmental, or municipal contribution applicable in the present and future. The foregoing applies only to those natural or legal persons with residence abroad. VII. CONTROL OF TRUSTS AND PUBLIC-PRIVATE PARTNERSHIPS (APP)

With the purpose of maintaining a reliable register of contingent liabilities to which the State is exposed, the creation of the Contingent Liability Registration Committee is approved, which shall be composed of technical staff from the Comptroller General of the Republic, who shall preside over and register it, General Directorate of Public Credit, General Directorate of Public Investments, Macro Fiscal Policy Directorate, General Directorate of Budget, Fiscal Contingencies Unit, Legal Services Unit of the Ministry of State in the Office of Finance. The Public-Private Partnership Superintendency shall provide the reports that the Regular Budget Commission of the National Congress and the Contingent Liability Records Committee regularly request, for the purposes that may be appropriate.

Without prejudice to what is established in Article 78 of the Organic Budget Law, the State may recognize a minimum annual income to those contracts executed as of 2016 and that are developed under Public-Private Partnership schemes. The Ministry of State in the Office of Finance shall make the necessary provisions for its recognition in the General Budget of Income and Expenditures of the Republic of the following Fiscal Year.

In all investment contracts, including those in which Public-Private Partnerships are established or in possible modifications of such contracts, which imply for the State of Honduras the granting of guarantees or a contingency, prior authorization from the Secretariat of State in the Office of Finance shall be required before their execution.

The Secretariat of State in the Office of Finance is authorized to register in SIAFI the operations derived from Trust contracts established by the institutions of the Central Administration. The committees responsible for coordinating and monitoring the trusts shall report monthly on such operations to the Secretariat of State in the Office of Finance and to the Executing Institution. Likewise, the Secretariat of State in the Office of Finance shall send quarterly reports of the State's Trust operations to the Ordinary Budget Commission of the National Congress. The institutions that require regularizing the operations of the trusts shall manage before the trust's managing body the supporting documentation to make the corresponding registration in SIAFI, within a maximum period of two (2) months; the committees responsible for coordinating and monitoring said trusts shall not grant further disbursements to the offending institution until this mandate has been complied with. Likewise, all Decentralized Institutions that have established Trusts shall perform the registrations derived therefrom and comply with the rules indicated above.

The new Trusts established by the Institutions of the Central Administration as of the present Fiscal Year must be incorporated into the General Budget of Income and Expenditures of the Republic and the operations derived from these Contracts must be recorded in the Integrated Financial Administration System (SIAFI) by each Executing Institution; complying with the Trust Registration procedure approved by SEFIN. When it does not apply to affect the Trust Resources, the Institution shall be formulated in Institution 449 detailed by Trust. The committees responsible for coordinating and monitoring the Trusts shall provide information about the operations corresponding to each Executing Unit which shall register them in SIAFI, no later than five (5) days after performing an operation or financial movement in the Trust. Of the funds held in trust to finance investment projects, up to TEN PERCENT (10%) of said funds may be used to finance operating expenses linked to the project. In the case of Decentralized Institutions, they shall report monthly to the Secretariat of State in the Office of Finance the information on the different Trusts they administer.

The Secretariat of State in the Office of Finance shall participate in all stages of the project cycle under the modality of public-private financing (APP), as well as in the review of the cost-benefit analysis and payment capacity of the public entity participating under this modality.

All concessionaires and Fiduciaries are obligated to present no later than FIVE (5) business days after the end of the month to the Fiscal Contingencies Unit of the Secretariat of State in the Office of Finance (SEFIN) and to the Superintendence of Public-Private Associations (SAP), all the financial information of the operations. VIII. CONTRACTS OF PUBLIC ADMINISTRATION

For the purposes of application of Articles 38 and 63 numeral 3) of the State Procurement Law and other applicable laws, the required amounts are established for applying public bids, competitions or quotations: 1) Contracts for Works, Consultancies, Investment Projects, Feasibility Studies, Works Supervision and Leasing of Real Property: For amounts equal to or greater than TWO MILLION LEMPIRAS (L2,000,000.00), must comply with the public bidding procedure. Amounts equal to ONE MILLION LEMPIRAS (L1,000,000.00) and less than TWO MILLION LEMPIRAS (L2,000,000.00) must comply with the private bidding procedure. Amounts less than ONE MILLION LEMPIRAS (L1,000,000.00) shall be contracted directly requiring a minimum of three (3) quotations as a requirement. The amount of a Real Property Leasing contract shall be calculated by the total of its annual rent. The obligation to submit to Public Bidding is excepted for real property leasing contracts of the Public Sector, when they represent greater damage to the institution due to mobilization, price, location and quality of service. In these cases, the extension of contracts executed by annual periods is authorized. 2) Purchase Orders or Supply Contracts for Goods and Services: For amounts equal to or greater than FIVE HUNDRED FIFTY THOUSAND LEMPIRAS (L550,000.00), must comply with the Public Bidding procedure. Amounts equal to TWO HUNDRED FORTY THOUSAND LEMPIRAS (L240,000.00) and less than FIVE HUNDRED FIFTY THOUSAND LEMPIRAS (L550,000.00) must comply with the Private Bidding procedure. Amounts less than said amount shall be contracted directly; amounts less than TWO HUNDRED FORTY THOUSAND LEMPIRAS (L240,000.00) must carry out a minimum of TWO (2) quotations, when the amount does not exceed SEVENTY-FIVE THOUSAND LEMPIRAS (L75,000.00); for amounts greater than the aforementioned and up to TWO HUNDRED FORTY THOUSAND LEMPIRAS (L240,000.00), a minimum of THREE (3) quotations shall be required. The quotations referred to in this Article must be from unrelated suppliers to each other, in accordance with what is certified in Decree No. 232-2011 of December 8, 2011, containing the Law Regulating Transfer Prices, and in the quotation document the general data of the supplier as well as the RTN number shall appear.

It is understood that the amount of contracts executed by the State includes the payment of corresponding taxes, except for exemptions expressly determined by a National Law or International Agreement.

When at the beginning of Fiscal Year 2016 the process required for a new contract has not been completed, exceptionally and without prejudice to the responsibility that corresponds in those cases where there is a serious risk of damage to the public interest, the continuation of the effects of the contract may be authorized by reasoned resolution issued by the competent superior authority, for such time as strictly necessary up to a maximum of three (3) months, within which such procedure must be completed, except in cases where such bidding process has been declared void or unsuccessful in accordance with Law, in which case said contract may be extended under the same conditions and up to a final period of three (3) more months. The extension shall be made by agreement between parties, prior to the opinion of the administration containing legal, technical and financial opinion of the respective Institution and shall be formalized by Agreement or Resolution of the institution, as applicable. The foregoing shall apply provided it does not contravene what is established in Articles 122 and 123 of the State Procurement Law.

For the purpose of complying with the provisions of Article 84 of the Organic Budget Law, which establishes the operability of the Single Account of the General Treasury of the Republic, the Secretariat of State in the Office of Finance is authorized to, through the direct contracting procedure, execute Financial Services Provision Agreements with the National Banking System in virtue of the fact that such institutions participate in these Agreements with simple compliance of technical requirements of communication between the Systems of each financial institution and the Integrated Financial Administration System (SIAFI). Said process must be supervised by the Superior Court of Accounts (TSC). Likewise, the Secretariat of State in the Office of Finance is empowered to, in coordination with the Executive Directorate of Income, proceed to renegotiate the Tax Collection and Recovery Contract, executed with the Central Bank of Honduras, which must reflect the actual costs of the collection and recovery services of said Bank.

In observance of the provisions of Article 72, second and third paragraphs, of the State Procurement Law, the daily fine applicable for non-compliance with the deadline must be established both in the conditions document as well as in the Construction and Supervision of Public Works contract. This same provision shall apply to all goods and services contracts executed by Institutions of the Public Sector. The value of the fines referred to in the preceding paragraphs shall be in relation to the balance of the contract amount, establishing it at zero point eighteen percent (0.18%).

Only payments shall be authorized that imply advance of funds for public works contracts in accordance with what is established in the State Procurement Law, which shall not exceed fifteen percent (15%) of the total amount of the contract. In cases of construction contracts for works and insurance derived from international agreements, the advance shall be authorized in the manner and amount established by the regulations of the Financial Organization. To foreign contractors, advance may be granted only when the respective projects are financed at a minimum of eighty percent (80%) with external funds. The dependencies of the Executive Branch are authorized to pay as advance, in the leasing contracts they execute, up to the equivalent of one (1) month of rent as a deposit, which shall remain as payment of the rent for the last month in case of resolution of the real property leasing contract. To avoid budget discrepancies, the dependencies of the Central, Decentralized and De-concentrated Government are prohibited from executing real property leasing contracts within the country in a currency other than the Lempira; the aforementioned is excepted by those that are so established in International Agreements.

In all contracts financed with external funds, the suspension or cancellation of the loan or donation may give rise to the rescission or resolution of the contract, without further obligation on the part of the State than the payment corresponding to the works or services already executed as of the date of effectiveness of the rescission or resolution of the contract. The same shall occur in case of budget cuts of national funds that are effectuated due to the country's economic and financial situation, the estimation of the perception of income less than projected expenditures, and in case of unforeseen needs or emergencies. The provisions of this Article must be obligatorily stipulated in the conditions documents, bidding bases, terms of reference or other prior documents before the execution of the contract and in the contract itself of the Public Sector.

In accordance with applicable laws, based on their budgetary allocations and for the purpose of promoting decentralization in the Secretariat of State in the Office of Health, acquisitions of one hundred percent (100%) of the resources allocated in the spending objects for: food and beverages for persons (31100) and minor surgical medical instrumental locally and centrally and laboratory equipment (39500) must be made by the administrations of the departmental regions and the hospitals of the country. Said acquisitions shall be made using the electronic catalog administered by ONCAE, except for the exceptions qualified by ONCAE in accordance with the Law on Efficient and Transparent Purchases through Electronic Means. However, purchases of medications must be made by the Administrative Management of the Secretariat of State in the Office of Health at the central level in ninety percent (90%), through the Trust established for such purpose, excluding hospitals that have completed their decentralization process. The remaining ten percent (10%) shall be acquired by each Hospital and Departmental Region of the Secretariat of State in the Office of Health, according to budgetary allocation. In all cases, the acquisition processes of the administrations of the departmental regions, the hospitals of the country, and the Administrative Management of the Office of Health shall be carried out in accordance with the State Procurement Law or Law on Efficient and Transparent Purchases through Electronic Means and other related laws, using the instruments provided by ONCAE.

Contracting charged to the Spending Sub-group 24000 Technical and Professional Services (Consultants) shall be conducted under the responsibility of the head of each institution, provided there is availability in the budgetary allocation of the current Fiscal Year. This type of obligations shall be formalized through Contract. The contractor under this modality shall not be considered for any purpose as a Permanent or Temporary employee of the institution. For the purpose of regulating contracting charged to Spending Sub-group 24000, increases are prohibited by budgetary modifications for spending objects belonging to this group; this rule applies exclusively to resources from source 11 National Treasury. The contracts for medical, sanitary and social services (spending object 24100) are excepted from this provision. Furthermore, the contracting of legal professionals as external consultants is prohibited for the handling of claims filed in the Courts of the Republic when the institution has legal departments for such purpose. The foregoing is excepted in those cases in which the Office of the Attorney General of the Republic considers it appropriate to contract them, to safeguard national interests, and must issue a favorable Opinion containing the amount of their fees for contracting and charged to the budget of the corresponding institution. The regulation of this law shall classify the cases referred to in the preceding paragraph. The prohibitions and incapacities to contract established by Articles 15 and 16 of the State Procurement Law shall apply to all contracts executed by the Public Administration, regardless of their modality.

Any natural or legal person who is contracted under the modality of Personal Services of Professionals and Technicians, Spending Object 12100, 12900 and Consultancy Services, Spending Group 24000, financed with resources from National Funds, Loans and/or Donations, are obligated to pay Income Tax, excepting those that the financing agreement expressly exempts.

Public Sector Institutions may enter into contracts for the provision of professional services or consulting with national consultants under the following conditions:

• 1)

  In their contracting, greater weight shall be given to the result or activity executed than to the time;

• 2)

  By the nature of the contract, the consultant has no right to vacations, thirteenth month as a bonus, fourteenth month as social compensation, and other rights inherent to employees financed through Group 10000 Personal Services; and,

• 3)

  All consultants must be registered and paid through SIAFI. The head of each institution that executes this type of contract and grants any of the benefits mentioned in the preceding paragraph shall be financially and jointly responsible, without prejudice to civil, administrative, and criminal actions before the audit authorities. A National Consultant shall be understood as the professional who carries out his or her activity with permanent residence in the national territory.

The contracting of international consultants for programs or projects shall be made based on the conditions of the professional market and in accordance with the availability of budgetary and financial resources. Contracts for international consultants for programs and projects with external financing shall be governed by what is established in credit agreements, letters, accords, memoranda of understanding, or donation agreements. The setting or estimation of fees shall be stated in the budgets agreed upon between the executing entity and the financing or cooperating organization. An International Consultant shall be understood as one who has performed consulting work in a country other than that of his or her nationality and whose permanent residence is different from that of the national territory. Consultants of foreign nationality may not perform activities of an administrative nature.

In order to ensure payment to the different contractors and suppliers, all institutions that operate in the Integrated Financial Administration System (SIAFI) must prepare the record at the moment of expenses called "commitment" as a credit reserve for the total of the obligation acquired, which shall decrease in accordance with the payments made. Likewise, this reserve must be related to the commitment quota assigned by the TGR.

Every State supplier and/or contractor at the moment of receipt of the purchase order or start of work must demand a copy of the Expense Execution Form F-01, registered in the Integrated Financial Administration System (SIAFI), in the stage of approved commitment, in order to ensure that the contracting institution has budgetary availability to honor the acquired commitments; otherwise, the Government of the Republic, through the State Secretariat in the Office of Finance, will not accept claims for payment of debts that do not have the respective budgetary support. Officials who violate the provisions of this Article shall be jointly and financially responsible for honoring all debts generated by not having the corresponding credit reserves.

The amount of a real estate lease contract shall be calculated by the total of its annual rent. Contracts for the lease of real estate of the public sector are exempt from the obligation to submit to public bidding, when they represent greater costs to the institution due to mobilization, price, location, and quality of service. In these cases, the extension of contracts executed by annual periods is authorized.

It is prohibited to enter into lease contracts for luxury real estate and air, maritime, and land transport equipment; medical insurance and first-class air transport expenses, with resources from external or internal sources or national treasury, as well as making payments for cellular telephone services from external sources. For the purposes of what is established in the preceding paragraph, those buildings whose conditions, characteristics, and location in areas whose lease cost exceeds TEN DOLLARS (US$10.00) or its equivalent in Lempiras per Square Meter shall be understood as luxury. The official who executes this type of contracting and payments shall be responsible with the amount of his or her salary, which shall be deducted automatically and shall be financially and jointly responsible, without prejudice to the civil, administrative, and criminal actions in which he or she may incur. IX. OF PUBLIC INVESTMENT

The State Secretariat in the Office of Finance, through the General Directorate of Public Investment, shall issue certification of whether fiscal space exists for the financing of a program or project, for which the requesting institution must submit the respective document, in accordance with the methodological guides approved for this purpose by the State Secretariat of General Government Coordination. Once the State Secretariat in the Office of Finance issues the related certification, the Presidential Directorate of Strategic Planning, Budget, and Investment of the State Secretariat of General Government Coordination shall certify whether the program or project is aligned with Government priorities. The priority note does not constitute an obligation for the State Secretariat in the Office of Finance to assign additional resources to those already budgeted, and it is valid for one year from the date of its issuance.

Based on what is established in Article 123 of the Law on Costs in Project Contracts, a "Technical Opinion on Amendment of Priority Note" of projects issued by the State Secretariat in the Office of Finance through the General Directorate of Public Investments shall be required.

Without prejudice to what is established in Article 12, numeral 5), literal b) of the Technical Norms of the Public Credit Subsystem, the National counterpart, when required by the financing organization, must be established in loan agreements up to ten percent (10%) and up to twenty percent (20%) for donations, preferably it shall be agreed in kind. Every executing institution of programs or projects must consider in its budget the values corresponding to counterparts when required. In exceptional cases, the State Secretariat in the Office of Finance is authorized to raise the percentage limit of national counterpart funds in accordance with the budgetary and financial capacity of projects that require special treatment. Likewise, administrative expenses must not exceed ten percent (10%) in relation to the budget assigned for each project, which must be clearly reflected in the budgetary structure corresponding to administrative expenses of the Executing Unit.

The State Secretariat of General Government Coordination, based on technical opinions from the Presidential Directorate of Strategic Planning, Budget, and Public Investment and the Presidential Directorate of Results Management, shall recommend the closure and reorientation of resources of those projects in alert status. This shall be rated according to the performance indicator that measures time and cumulative execution amounts based on the analysis carried out by the General Directorate of Public Investment of the State Secretariat in the Office of Finance and by the Presidential Office of Project Monitoring of the State Secretariat of General Government Coordination, which shall prepare a monthly report. Said report shall be sent to the President of the Republic, the State Secretary of General Government Coordination, and the State Secretary in the Office of Finance.

Extensions of project closing dates regardless of the source of financing must have the Technical Opinion from the General Directorate of Public Investments of the State Secretariat in the Office of Finance. Projects financed with external funds, prior to the proceedings before International Organizations by the General Directorate of Public Credit, shall require the technical opinion of the General Directorate of Public Investments of the State Secretariat in the Office of Finance for: extension of terms, disbursement period, project closure, and grace period, which must be established in international agreements. For the issuance of said opinion, it is a mandatory requirement to present to the General Directorate of Public Investments the following:

• 1)

  Report of cumulative physical and financial execution of the project;

• 2)

  Reprogramming of the activities that include costs per activity, and in the project closure stage must contemplate only administrative and accounting personnel;

• 3)

  Evidence that administrative expenses do not exceed 10.0% with respect to the total investment.

• 4)

  Have seventy-five percent (75%) of the committed resources (reimbursable and non-reimbursable funds) according to the executed contract; and,

• 5)

  Corresponding justifications.

For programs and projects in closure, only the administrative and accounting personnel necessary to comply with the closure activities thereof must be maintained in the executing unit. To comply with the above, the General Directorate of Public Investments of the State Secretariat in the Office of Finance shall issue a Technical Opinion in which it shall evaluate the necessity of human resources and the estimated time to complete this activity.

The General Directorate of Public Investments shall recommend to the Authorities of the State Secretariat in the Office of Finance for timely decision-making, the closure and reorientation of resources of those projects in alert status, taking into account criteria on cumulative execution levels, timeframes, alignment, and other aspects based on the analysis performed.

For the approval of requests for modifications to budgetary allocations of public investment projects among specific expenditure items or transfers between categories of the same program, as well as the transfer of funds between investment projects, justification and supporting documentation shall be required that permits technical analysis and the prior issuance of a favorable opinion from the General Directorate of Public Investments of the State Secretariat in the Office of Finance.

The projects contemplated in the Public Investment Program cannot be carried out by Direct Administration by the same institutions of the Central, Decentralized, and Deconcentrated Government when the value exceeds ONE MILLION EIGHT HUNDRED THOUSAND LEMPIRAS (L1,800,000.00). However, the Head of the Executive Branch, when he or she deems it necessary, may authorize by Agreement and through the corresponding Office, that the construction of works be carried out by Direct Administration, up to a maximum value of THREE MILLION SIX HUNDRED THOUSAND LEMPIRAS (L3,600,000.00).

The State Secretary in Charge of the Treasury Department is hereby authorized to, through the General Directorate of Public Investments, consider as part of the prioritization process for new investments, indicators of comprehensive disaster risk management, climate change, gender equity, specific programs aimed at women and human rights, as well as the priorities established in the Regional Development Plans, in order to promote more balanced development among the regions of the Country Vision and in accordance with the natural, cultural and social potentialities of the territory and its approach to the four (4) objectives of the plan for all for a better life.

Budget modifications shall not be permitted that affect capital expenditure allocations to finance current expenditures from any source of financing. Should such modifications be necessary, they must have the approval of the President of the Republic and shall be formalized through an Executive Agreement.

The institutions of the Central Government, Decentralized, and Deconcentrated Government that execute public investment programs and projects regardless of their source of financing must adjust their programming of commitments and payments strictly to the Budget Approved by the National Congress.

Notwithstanding what is established in the preceding Article, when the incorporation of external funds from loans is strictly necessary, the public institution shall prioritize based on its execution level in order to analyze the necessary transfers and be able to cover the obligations acquired. Likewise, the State Secretary of General Government Coordination shall request that the State Secretary in Charge of the Treasury Department conduct the corresponding analyses in accordance with the fiscal policy goals defined for Fiscal Year 2016. For such purpose, the State Secretary in Charge of the Treasury Department is authorized to create Budget Space in the institutions that require it and to reduce it in others through an internal resolution following analysis of the projects and programs involved. New resources incorporated for projects executed by Municipalities shall receive equal treatment. In the case of funds from donations, budget support and other external sources, provided that they are received in the same year they are to be executed, they shall be incorporated automatically; otherwise, they shall be analyzed by the Budget Incorporation Committee of the State Secretary in Charge of the Treasury Department.

In follow-up to the implementation of the information technology tool of the National System of Public Investments of Honduras (SNIPH), all institutions of the Public Sector that execute public investment programs and projects, whether with national and/or external sources, shall have the obligation to register and maintain updated physical and financial information thereof in the System in accordance with the project lifecycle. Non-compliance with this provision shall result in the State Secretary in Charge of the Treasury Department, through the General Directorate of Public Investments, proceeding to temporarily disable the code assigned in the SNIPH until compliance with what is established in this Article.

All institutions of the Public Sector that execute programs and projects that contribute to the mitigation of and adaptation to climate change, based on technical criteria, budget classifiers and methodology, must be identified and marked in the programmatic structure at the activity or work level in the pluriannual budget formulation (2016-2019).

All institutions of the Public Sector that execute public investment programs and projects whether with national or external funds shall register the original contract and its respective modifications, if any, in the National System of Public Investments (SNIPH) for the respective monitoring. When the project is financed with national funds, the analysis shall be based on the State Contracting Law; in case it is financed with external resources, the regulations of the corresponding financial body shall apply, in monitoring of Article 1 of such Law. Once the corresponding instrument is executed, the institution shall be obligated to make the respective publication on the HONDUCOMPRAS portal in accordance with what is established in Article 77 of the Regulations of the State Contracting Law. Non-compliance with this provision shall result in the State Secretary in Charge of the Treasury Department, through the General Directorate of Public Investments, proceeding to temporarily disable the code assigned in the SNIPH until compliance with what is established in this Article.

After the issuance of the Priority Notice issued by the State Secretary in Charge of the Treasury Department, through the General Directorate of Public Investments, when it is necessary to modify technical aspects in the project formulation, such as: modification to the investment plan and/or budget, inconsistencies in the project name, Executing Unit, location, coverage, increase or decrease in the total amount of the project, the institutions of the Public Sector shall request from the State Secretary in Charge of the Treasury Department a "Technical Opinion of Amendment of Issued Priority Notice". For this purpose, it shall be required that the institutions of the Public Sector, through the UPEGs, attach the proper supporting documentation that permits technical analysis for the issuance of the corresponding Opinion.

The Executing Units of Programs and Projects, prior to executing contracts for works, goods, services or supplies whose closing date extends beyond the project completion date, shall request from the State Secretary in Charge of the Treasury Department the respective extension of time.

Modifications between investment categories and components must have the Technical Opinion of the General Directorate of Public Investments (DGIP), prior to the proceedings by the General Directorate of Public Credit before international bodies, so the Executing Unit shall present the following information:

• 1)

  Approved budget and proposed modification by investment category/component;

• 2)

  Committed resources and availabilities according to agreement by investment category/component;

• 3)

  Report of accumulated physical and financial execution of the project; and,

• 4)

  Corresponding justifications. X. HUMAN RESOURCES ADMINISTRATION

The obligations derived from the payment of benefits, severance and indemnities established by Law shall be paid and assumed directly by the State, with the budget allocated to the institution where the public servant was providing services. In the same manner, the State shall assume payment for final court judgments regardless of their nature.

The salaries of employees and officials of the Institutions of the Decentralized Administration and Deconcentrated Entities, whether of a permanent nature, by contract or any other modality that enter public service during the validity of this Decree, must bear a relationship to the remuneration earned by those of equal rank in the Central Administration. To effect the monitoring and surveillance of the salaries of the Institutions of the Decentralized Administration and the Deconcentrated Entities without any exception, they must send to the State Secretary in Charge of the Treasury Department the complete payroll containing permanent, trust, temporary and daily wage personnel, within fifteen (15) days following the end of each quarter. Likewise, for statistical and control purposes, Decentralized Institutions must send monthly to the General Budget Directorate (DGP) and to the General Directorate of Decentralized Institutions (DGID), the list of personnel broken down by their different categories and classified by gender.

The institutions of the Central, Deconcentrated and Decentralized Government are hereby authorized so that, when a State employee resigns or is dismissed and the Thirteenth Month Salary as Bonus, Fourteenth Month Salary as social compensation, vacation or any other benefit that in accordance with Law or Collective Bargaining corresponds, has not been paid, the proportional payment of these shall be made effective at the moment of dismissal or resignation; without waiting for the established months to make the liquidation.

The payment of the Thirteenth Month Salary as Bonus and Fourteenth Month Salary as social compensation shall also be granted to the officials, daily wage and contract personnel of the Public Sector that are included in Group 10000 of Personal Services.

When positions are created or any personnel action is intended to be carried out, the procedure must be followed through the Human Resources Administration System (SIARH) of the Integrated Financial Administration System (SIAFI) for the administrative personnel of the Central Administration and in the case of Teaching Personnel of the Education Department, it must be done through the Teaching Human Resources Administration System (SIARHD). Prior to initiating these processes, the position structure and allocated budget must be in place, which shall be confirmed by the State Secretary in Charge of the Treasury Department. New positions shall not be created in the Detailed Annex of Basic Salaries and Wages without being classified; likewise, the corresponding personnel action procedure may not be initiated. The position structure must be generated in the General Directorate of Civil Service or in the Teaching Human Resources Sub-management as appropriate.

The Honduran Community Education Program (PROHECO), as of the year two thousand sixteen (2016), must pay the salaries corresponding to the teachers hired by said program through deposits to their respective bank accounts. For this purpose, it must have the technological platform that enables the making of payments and connectivity with the State's financial administration and human resource control systems; such as SIAFI and SIREP. Compliance with the foregoing shall be the responsibility of the Secretariat of State in the Office of Education through the administration of said program and, coordinated with the General Directorate of Human Talent of the same Secretariat.

During the last quarter of the year, no changes shall be authorized in the classification or salary of positions to be effective within said quarter, due to the formulation, presentation, and approval of the Project of General Budget of Income and Expenses of the Republic for the following Fiscal Year.

In the Teaching Sector (teaching staff), the division of teacher positions shall not be permitted, originating from retirement, vacant positions, or canceled positions with the purpose of complementing teaching hours of teachers; it is only authorized when they are intended for the hiring of teachers strictly working directly with students to whom the base salary would be assigned to meet the needs in single-teacher schools in the pre-basic and basic modality.

For personnel without a Teaching Degree or who do not meet the requirements to apply for a teaching position and who for this reason are hired as interim teachers, as of the month of February of the year 2016, the contract period must be effective as of the month of February, concluding in the month of November of each year.

For teachers under the modality of the Distance Secondary Education System (SEMED), hiring must be carried out for the periods of February to June and July to November of each year, as applicable.

Modifications to the position structure, ruled on by the General Directorate of Civil Service, or others governed by Special Laws, must be authorized by Internal Resolution of the Secretariat of State in the Office of Finance; these modifications must be financed with the budget approved to each Executing Unit of the Central Administration. Non-compliance with this Article shall be subject to the provisions of Article 5 of these Dispositions.

The savings in the allocations of basic salaries for Permanent Personnel, derived from the cancellation of positions, by the creation of positions through merger, temporarily vacant positions, positions that earn a lower salary than budgeted, or by the cancellation of supernumerary personnel in the Public Sector, must not be used for salary increases, adjustments, equalization, and/or appointment of emergency personnel nor be transferred for any other purpose; except: 1) For the creation of positions with prior favorable opinion from the Office of Finance, when it concerns personnel who by the nature of their functions are required for the normal functioning of any State agency; and, 2) To meet urgent and unforeseen needs, such as:

• a)

  Emergency expenses;

• b)

  Internal commotion or public calamity;

• c)

  Payment of labor benefits and/or severance; and,

• d)

  With the savings generated by vacant teaching positions in the Office of Education due to retirement, pension, death, or any other cause, they shall be reinvested one hundred percent (100%) in the programs and projects of the Office of Education to improve coverage and quality of Education in coordination with the Secretariat of State in the Office of Finance; likewise, teaching positions for first-time entrants may be created, assigning them the base salary established by Law.

The preparation of payroll sheets for personnel incorporated into the Civil Service Regime, Excluded Service, Daily Wages and Contracts, and other special statutes, with the exception of that governed by the Statute of the Honduran Teacher, shall be subject to the new System of Administration of Human Resources (SIARH), which is governed by the General Directorate of Civil Service, as a module of the Integrated Financial Administration System (SIAFI). The System of Administration of Teaching Human Resources (SIARHD) must have or develop interfaces with the Integrated Financial Administration System (SIAFI), for purposes of registration and electronic payment.

For the calculation of overtime hours, compliance must be made with the provisions of the Regulation of these General Dispositions. Without prejudice to the provisions of Article 31, numeral 1), subsection c) of the Law of Tax Equity, contained in Decree No. 51-2003 dated April 3, 2003, the personnel of Air Traffic Service (Air Controllers) and Aeronautical Information Services (Flight Plan) dependent on the General Directorate of Civil Aeronautics and Security, Transportation and Issuance Personnel and Treasury of the Central Bank of Honduras and National Bank of Agricultural Development, linked to custodial, transfer, and value handling duties, are incorporated within the exceptions referenced in said legal provision, related to the authorization and payment of overtime. The following officials are excluded from the payment of overtime hours: Secretaries and Under-secretaries of State, General Secretary, Presidential Directors, General Directors and Sub-directors, Directors and Sub-directors, Internal Auditor Chief, Administrative Manager, Managers, Sub-managers, Legal Advisor, Executive Presidents, Executive Secretaries, and Rectors and similar positions regardless of the position denomination.

Every action of transfer of position or teaching personnel, prior to its approval, must have the position or the person who is going to replace it, and must previously notify the Secretariat of State in the Office of Finance so that it may issue the Internal Resolution, the budgetary modification, and the Detailed Annex of Basic Salaries and Wages. For this purpose, the justification of the movement must be attached. In relation to the Secretariat of the Office of Health, every person who for any reason has been transferred to a zone, region, or area different from where the position is budgeted, must return to the place where they were appointed. Exceptions are made for positions for which the instance accepting the transfer assumes budgetary responsibility without prejudice to that originally made by the appointment.

The appointment of teachers and/or the assignment of functions in educational centers at all levels under the Ad honorem modality may be carried out provided that the service provider declares in said appointment that it is Ad honorem and that it does not generate nor will generate any economic responsibility to the State. Non-compliance with this norm shall make the officials or employees authorizing such actions personally responsible for the payment of these services.

The hiring of personnel charged to Specific Expenditure Object 12100 Basic Salaries (Non-Permanent Personnel) financed with Resources of the National Treasury (source 11) must be carried out in exceptional cases under the responsibility of the head of each institution, provided that the personnel to be hired appears in the Annual Operating Plan (POA) and that budgetary availability exists, in strict compliance with Article 200 of the Regulation of the Civil Service Law. This type of hiring shall be formalized through Internal Agreement of each Public Sector institution. The heads of the Executing Units and the contracting Administrative Managements are directly and exclusively responsible for the selection of this class of contractors, which must be carried out based on competencies, abilities, skills, academic merits, integrity, and other requirements of suitability considered necessary for the efficient performance of the position to be held. These contracts have validity only within the present Fiscal Year, and personnel hired under this modality must not be considered as permanent for any purpose, and their effectiveness shall be counted from the date on which this personnel takes possession of the position. It is prohibited to appoint non-permanent personnel when in the Detailed Annex of Basic Salaries and Wages of the Secretariats of State or their equivalent in the rest of the Public Sector Institutions there are approved positions for the performance of the functions, object of the contract. Officials who violate this Article shall be jointly and severally responsible financially for all obligations it generates.

Specific Object 12200 daily wages shall be exclusive for paying personnel whose salary is established by day or by hour, and in no case should it be used to pay personnel who perform administrative or technical functions. The appointment of personnel whose functions are different from those that correspond to the nature of work as daily wages is prohibited; in such cases direct responsibility shall fall on the official or officials who violate the provisions of this Article. This personnel is not classified as permanent for any purpose.

The hiring of temporary personnel (expenditure group 12000) shall be limited to the allocations and amounts approved in the General Budget of Income and Expenses of the Republic; in order to regulate these allocations, increases through budgetary modifications for this expenditure object are prohibited; with the exception of adjustments for minimum wage, reimbursements by judicial order, and back wages. This norm applies to all sources of financing, excepting resources from Donations.

For the payment of salaries of diplomatic or consular personnel or those holding representation positions abroad, after making the corresponding deductions, payment shall be made in accordance with the Law of Diplomatic and Consular Service. Any additional charge generated by exchange rate differential must be covered with its own budget.

Government officials or employees of the Central, Deconcentrated, and Decentralized Government who must participate in official events outside the country, invited by international institutions or organizations, may participate provided that per diems and other travel expenses are covered in their entirety by the sponsors; only airport departure taxes from the country will be recognized. When officials or employees of the Central, Deconcentrated, and Decentralized Government participate in official events outside the country with proper justification, using State resources, participation shall be limited to two (2) participants per Institution, and in all cases at the general level no type of allowance shall be authorized when per diems are provided by the event's sponsoring organism. When it comes to special missions carried out in representation of the country there shall be no limits to representation, provided that they are authorized by the Presidency of the Republic, through Executive Agreement. Excepted from what is established in this provision is the National Commission of Banks and Insurance (CNBS), due to the consolidated financial supervision work it performs jointly with entities at both national and international levels, maintaining links with regional and world institutions necessary to fulfill its main mission of exercising supervision and control of banking, insurance, and financial institutions and other regulated public and private institutions, including matters related to the prevention and combating of money laundering and terrorist financing, with the Intergovernmental Agreement FACTA with the Government of the United States of America; for all of its foreign trips, it shall be governed by the provisions contained in the Regulation of Per Diems and Other Travel Expenses for Officials and Employees of the Executive Power.

Budget allocations for scholarships may be used provided that the following is taken into consideration:

• 1)

  The execution of a commitment with executive force and immediate execution (Promissory Note or Bill of Exchange) as well as the contract between the scholar and the institutions of the public sector, aimed at obligating the scholar to, in reciprocity for the financial aid received, work for the agency that nominated him for a period not less than double the duration of the financial aid for the completion of studies, upon certified proof of having obtained the respective degree or degrees. In case of non-compliance with these conditions the scholar is obligated to return the amounts granted, in the currency in which they were received or its equivalent at the exchange rate in effect at the time of assuming the obligation to repay. Only for reasons of sufficient force majeure as determined by the Administration through the institution that nominated him shall the scholar be exempt from such responsibility;

• 2)

  That the State guarantee the permanently employed scholarship recipient the job in the position he occupied on the date he was authorized to study within or outside the country and that upon return he be assigned functions in accordance with his level of study and if possible the corresponding salary according to the level of studies achieved; and,

• 3)

  That scholarships granted within and outside the country be preferably for permanent staff (item 11100) or by contract (item 12100) who have at least one year of seniority in service; in the case of contract staff, by not being permanent employees, the State reserves the right to execute a new contract after the scholarship ends and the respective degree is obtained. Notwithstanding what is established here, the agency that has sponsored a scholarship may authorize the scholar to fulfill this obligation by providing services in a government agency different from the one that granted the scholarship. Preference is given to scholarship applications where the applicants are women who have sponsorship of partial or total financing from national, international institutions or organizations, or from cooperating Governments, being able to grant full or partial scholarships to private individuals, provided that there is a convention with such organizations that expressly establishes it. The State reserves the right to contract these persons after the scholarship ends and the respective degree is obtained. In case the duration of this benefit does not exceed one (1) month or when it comes to scholarships, studies, or seminars to be developed in the country or abroad, its authorization shall be formalized through a letter from the head of the agency in the Central Administration, in Decentralized Institutions it shall be done through a letter from the head thereof, and in the Judicial Branch and Legislative Branch it shall be done through their internal regulations. If the duration of the scholarship exceeds one (1) month the authorization or extension shall be made through Ministerial Agreement, when dealing with State Departments, in the case of Deconcentrated Bodies and Decentralized Institutions the authorization shall be made through resolution of the Governing Body, in the Judicial Branch and Legislative Branch it shall be done through their internal regulations. In all cases the financing of studies must be covered with resources allocated for that purpose in the budget of each institution of the Central Administration, Deconcentrated Organisms, and Decentralized Institutions.

Former employees who have been retired by any social security institution of the Decentralized Administration may be hired in exceptional cases, with national or external funds, to provide their personal services, provided that they present the corresponding act of suspension of the retirement benefit extended by the respective social security institution. With the exception of those who have provided their services in the areas of Teaching, Health, Security and National Defense. Those who are retired from any social security institute and are elected to a position of popular election may continue to enjoy their retirement and also the salary for the new position.

Based on what is established in Legislative Decree No. 18-2010 of March 28, 2010, containing the Fiscal and Financial Emergency Law, for Fiscal Year 2016 salary increases in the Public Administration are frozen. Excepted from this provision are those entities that have the respective financial and budgetary availability, for which the public institution that intends to grant this benefit must attach to the request the economic and financial study that demonstrates the sustainability of the benefit so that at the State Department in the Finance Office the corresponding favorable Opinion is issued.

The salaries earned by the Secretaries and Under-Secretaries of State shall be those that appear approved in the Detailed Annex of Basic Salaries and Wages of the Central Administration, which is an integral part of the General Budget of Income and Expenditures of the Republic.

Institutions of the Central, Decentralized, and Deconcentrated Government may not allocate funds from any type of loan or donation for the purpose of making allowances or salary increases or granting extra salaries to public servants.

The obligation of the State to make payment in the concept of half of one percent (1/2 of 1%) of the total amount of permanent salaries and wages of the Central Administration, as employer contribution to the National Institute of Professional Training (INFOP), shall be limited to the allocation approved in the Budget of the Departments of Labor and Social Security for the present Fiscal Year.

The employer contribution that the State pays to Social Security Institutes cannot exceed the percentage established in their respective Laws. The allocations intended for payment of the employer contribution to the aforementioned Institutes cannot be transferred for another purpose. Likewise, both employer and employee contributions of public servants must be entered in full to the social security institutes in the month that corresponds, being strictly prohibited to use them for other purposes. Non-compliance with this Provision shall be subject to the sanctions stipulated in Article 5 of this Law. The Department Heads and Administrative Managers or those acting in their stead who fail to comply with this Article shall be jointly and severally liable financially for all obligations generated without prejudice to civil, administrative, and criminal liability.

Deductions for Income Tax from officials, employees, and contractors of the public sector and any other type of deduction or withholding made from payments in favor of suppliers of goods and/or services or from employees must be entered in full by the respective institutions in the month that corresponds, being strictly prohibited to use them for other purposes. The Department Heads and Administrative Managers or those acting in their stead who fail to comply with this Article shall be jointly and severally liable financially for all obligations generated without prejudice to civil, administrative, and criminal liability.

The State Department in the Finance Office is authorized to incorporate in the budget of the Executive Directorate of Income (DEI) one hundred percent (100%) of the amounts deposited by companies as payment for operational fees for the customs supervision and surveillance service provided by this Institution to Companies under special regimes, bonded warehouses, temporary deposits and others, and which are transferred to the receiving account of the General Treasury of the Republic. These values shall be given the accounting treatment as own resources to cover payments for salaries, their related benefits, overtime, labor benefits, and other rights, as well as payment of per diems, transportation expenses, and any other expense necessary to perform supervision duties directly or through third parties of the human resources working in the functions described above. In the same manner it may arrange what is necessary to implement control mechanisms in said companies. All values received by the Executive Directorate of Income (DEI) must obligatorily be entered into the General Treasury of the Republic and prior to their utilization they shall be obligated to present the detail of expenses to be executed to the State Department in the Finance Office for its respective Opinion.

All officials of the Central Government and Deconcentrated Institutions included in Article 3 of the Civil Service Law shall enjoy the right to enjoy annual unpaid vacation granted in accordance with the periods established by said Law, provided that the following circumstances occur: 1) That he/she is outside the System established by the Civil Service Law and its Implementing Regulation; and, 2) This right is acquired after completing the first year of service continuously. In case that due to work requirements officials of the Central Government and Deconcentrated Institutions have not enjoyed vacation time in accordance with the Law, they shall have the right to payment of the same. For these purposes, they must meet the requirements established in Article 128 of the Regulation of the Civil Service Law.

The appointment of personnel by Agreement as excluded is prohibited in positions not included in Article 3 of the Civil Service Law.

Public Servants who, having been terminated, have sued the institution in which they worked, during the time the case is pending judgment may work under the contracting form (Temporary) in any institution of the Public Sector. In the case of a final judgment in which the State is condemned to payment of compensation or reinstatement with the payment of damages and losses for unpaid salaries, the salaries received by the contract worker during the course of the litigation shall form part of the quantification of the compensation for unpaid salaries set forth in the condemning judgment, in consequence shall form part of the final settlement payment made effective to the contract worker. The official who violates what is established in the first paragraph of this Article and makes an appointment under the agreement modality shall be subject to the application of a fine equivalent to Ten (10) minimum salaries.

Personnel appointments to vacant positions shall be permitted only when the base salary is assigned; the merger of positions to create a new one shall be permitted provided that it generates savings of thirty percent (30.0%) of the total amount of the merged positions and the creation of positions resulting from the division of the same position is prohibited.

With the purpose of imprinting greater efficiency and effectiveness in the performance of the institutions of the Central Administration, Deconcentrated Bodies and Decentralized Institutions, at least sixty percent (60%) of the vacant positions existing as of December 31, 2015 shall be filled, except those positions of teaching service, health care and security, and the new institutions created under Legislative Decree 266-2013. The General Directorate of Civil Service and equivalent bodies in the rest of the institutions of the Public Sector must submit to the State Department in the Finance Office and to the Superior Court of Accounts (TSC) no later than January 30, 2016 the corresponding reports demonstrating the actions taken in compliance with this provision.

The Institutions of Decentralized Administration and Deconcentrated Entities shall present to the State Secretary of the Office of Finance, specifically to the General Directorate of Budget, no later than January 31, 2016, the Detailed Annex of Salaries and Wages corresponding to the Fiscal Year 2016 in accordance with the format provided by the State Secretary of the Office of Finance. This must contain the positions of permanent staff, personnel of trust, temporary and daily wage workers, collateral benefits and other benefits granted to them. Likewise, this shall be updated in accordance with the changes that occur during the Fiscal Year.

The salaries of all employees and officials of the institutions of the Central Administration, Decentralized Administration and Deconcentrated Entities shall be registered month by month in the Public Employee Registry System (SIREP) in accordance with their payment mechanism (monthly, biweekly, fourteen-day, among others), the foregoing for employees registered in the Personal Services Group, financed with national funds, own funds or external funds. Likewise, all Consultants who receive professional fees and who are registered under the Non-Personal Services expense group financed from any source shall be registered in SIREP. In the case of the Central Administration, the sole payment mechanism for institutions shall be through the Integrated Financial Administration System (SIAFI); in the case of Institutions of Decentralized Administration, their payment process shall continue to be carried out through their respective mechanisms. XI. OF DECENTRALIZED INSTITUTIONS

The Public Institutes of Social Welfare and Security, prior to any modification in the structure of benefits to active members, pensioners and retirees of their systems, including changes in the periodicity of payment and increases in the amounts of pensions, must obtain authorization from the National Commission of Banks and Insurance (CNBS), for which they must submit the corresponding request, attaching to it the technical actuarial study that supports the financial capacity of the Institute. Likewise, the revaluation of pensions may not exceed the annual inflation rate and for its granting the institution must have the budgetary and financial capacity, backed by the corresponding technical actuarial study.

The Public Institutes of Social Welfare and Security shall send to the General Directorate of Decentralized Institutions of the State Secretary of the Office of Finance on a monthly basis no later than ten (10) days after the end of the month the complete detail of the financial investments they maintain in the National Financial System.

The National Port Enterprise (ENP) when it has exceeded or when it has profits must transfer to the Central Administration the amount of SIXTY MILLION LEMPIRAS EXACTLY (L.60,000,000.00). This Institution is prohibited from directing such Transfer toward a purpose other than those approved in accordance with Law or executed in favor of a different beneficiary. The amount described in this Article must be paid to the General Treasury of the Republic, in accordance with the payment schedule that is jointly prepared between the Treasury and the aforementioned Institution, which must be agreed upon no later than January 31, 2016; the maximum payment date must not exceed the last day of each month and the last installment must be deposited no later than November 30. In case of non-compliance with this obligation, the State Secretary of the Office of Finance is empowered to request the Central Bank of Honduras to automatically debit from the bank accounts that this institution maintains in said Bank and/or in the rest of the National Financial System the amounts of the pending payment installments. Notwithstanding the foregoing, the Executive Branch through the State Secretary of the Office of Finance may authorize and dispose, in case the financial situation of these Institutions permits, additional or complementary funds to address programs and projects that the Government deems necessary, subject to approval by the National Congress.

From the transfer consigned in the foregoing Article for the Central Administration coming from the National Port Enterprise (ENP), an amount of TEN MILLION LEMPIRAS EXACTLY (L.10,000,000.00) shall be allocated to finance the operability of the National Port Protection Commission (CNPP), in compliance with the provisions of Article 2 of Executive Decree PCM-050-2013. The CNPP shall adjust its POA and 2016 Budget to the figure approved in this Law, likewise it must present to the State Secretary of the Office of Finance, through the Administrative Management, the corresponding monthly reports of both physical and financial progress; the foregoing shall be a condition for the corresponding disbursements.

The budgetary modifications of Decentralized Institutions are governed by the provisions of Article 51 of the Organic Budget Law, as well as by the Technical Standards of the Budget Subsystem. Exceptions are those operations related to debt service and exchange rate variations, carried out by the Central Bank of Honduras, which must be approved by its Board of Directors and report to the State Secretary of the Office of Finance for purposes of monitoring and control. Notwithstanding the foregoing, Decentralized Institutions that generate their own resources are authorized to proceed with the incorporation of the same, exempting them from the application of Article 51 of the Organic Budget Law, provided that the availability of the resources to be incorporated is demonstrated and that the total of the projected approved income has been collected at one hundred percent (100%).

The Budget of the National Electrical Energy Enterprise (ENEE) includes resources intended to finance the Social Fund for Electrical Development (FOSODE) for rural electrification, said resources cannot be used by the National Electrical Energy Enterprise (ENEE) for purposes other than those for which they were authorized. Only the National Congress shall indicate the use of the funds through its Presidency.

All Institutions of Decentralized Administration and Deconcentrated Entities are obligated to present no later than ten (10) days after the end of the month, before the General Accounting Office of the Republic the Financial Statements and other necessary information for the continuous monitoring of their financial situation, complying for their presentation with the requirements established in the International Accounting Standards; said information shall be sent in digital format to the State Secretary of the Office of Finance specifically to the General Directorate of Budget, General Directorate of Decentralized Institutions and to the General Accounting Office of the Republic.

Decentralized and Deconcentrated Institutions operating outside the Integrated Financial Administration System (SIAFI) shall send no later than January 30, 2016, the inventory of property for use and consumption existing as of December 31 of the fiscal year 2015, as well as a detail of the losses in these inventories. Said information must be sent to the General Directorate of National Assets (DGBN).

In order to generate savings, the meetings of Boards of Directors or Governing Bodies of Decentralized Institutions shall be held with the members and representatives provided for by their respective Laws and avoid additional expenses derived from the holding of sessions carried out outside their headquarters.

All Institutions of Decentralized Administration that have transfers consigned in their budget for the Honduran Institute for the Prevention of Alcoholism, Drug Addiction and Pharmacological Dependence (IHADFA) shall make such transfer effective before the end of October 2016, as well as any other transfer consigned in their budgets. In the particular case of social welfare and security institutes, such transfer must be financed with the additional resources that such institutions receive, resources other than the contributions and/or fees that they receive from system affiliates.

Public Service Enterprises are ordered to proceed, within the period of one year effective as of the date this Law takes effect, to clean up accounts pending collection for the provision of services, having the option of performing subrogation for the recovery of the debt in default or reaching a payment arrangement. The results of these actions must be reported quarterly to the Superior Court of Accounts, to the Institute of Access to Public Information and to the State Secretary of the Office of Finance. XII. OF THE STRATEGY FOR THE REDUCTION OF POVERTY

The values and resources for executing programs and projects of the Strategy for the Reduction of Poverty (ERP) must be incorporated in each executing unit of the different institutions of the Public Sector, in accordance with the provisions of the Technical Standards of the Budget and Public Investment Subsystems, insofar as applicable.

The resources coming from debt relief under the Heavily Indebted Poor Countries Initiative (HIPC), the Multilateral Debt Relief Initiative (MDRI) and as it corresponds to the Paris Club must be allocated exclusively for the carryover projects consigned in the Annex "Strategy for the Reduction of Poverty", which is part of the present Budget of Income and Expenses of the Republic, Fiscal Year 2016.

The Service of Public Debt corresponding to the borrowing agreements that comprise the group of loans subject to reorganization and that improve the profile of public debt, shall be executed budgetarily through the Integrated Financial Administration System (SIAFI) and its interface with the Debt Management and Administration System (SIGADE), on the dates and terms established in the respective loan agreements or contracts. Simultaneously, the income that this debt relief concession could generate must be registered in the Integrated Financial Administration System (SIAFI) and the funds thus obtained shall constitute the resources of the Heavily Indebted Poor Countries Initiative (HIPC), Multilateral Debt Relief Initiative (MDRI), and Paris Club that shall serve as the basis for financing programs and projects for poverty eradication. XIII. OF MUNICIPALITIES

The State through the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization shall transfer the amount allocated and authorized through monthly installments to Municipal Corporations according to the following distribution: 1) Forty-five percent (45%) of the transfers shall be distributed in equal parts to municipalities for social assistance programs for children, care for returned migrants, adolescence and youth; likewise from this allocation five percent (5%) shall be allocated for Women's programs; which shall be monitored by the National Institute of Women in Coordination with the Municipal Women's Offices (OMM) and Women's Organizations. 2) Five percent (5%) of the total amount of transfers shall be distributed based on the criterion of fiscal efficiency and collection effort; and, 3) The remaining fifty percent (50%) shall be distributed according to the following criteria: a) Twenty percent (20%) by projected population according to the last Population and Housing Census conducted by the National Institute of Statistics (INE); and, b) Thirty percent (30%) by poverty, according to the proportion of poor population in each municipality based on the Unmet Basic Needs (NBI) method and according to the last Population and Housing Census. Taking into account gender conditions, especially that women are those who comprise the highest levels of poverty. For purposes of the applicability of transfers to municipalities, in accordance with Article 91 of the Municipalities Law Decree, a Commission shall be integrated with representatives of the State Secretariat of Human Rights, Justice, Governance and Decentralization, Association of Municipalities of Honduras (AMHON), and the State Secretariat in the Office of Finance during the First Semester of the year 2016, to define the budgetary allocation corresponding to the Municipalities for the year 2017, based on what is provided in Article 91 of the Municipalities Law. Of the total amount of transfers from the Central Government, Municipal Corporations shall allocate the transfer resources in accordance with what is established in the Municipalities Law or what is contained in the Municipal Pact for a Better Life subscribed between AMHON and the Executive Power, without affecting the five percent (5%) allocated to women established in subsection 1 of this article, and must notify their decision to the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization. The destination of funds under the Municipal Pact for a Better Life shall be applied as follows:

• 1)

  Forty percent (40%) for investments that improve the living conditions of the population through programs and projects for the provision of social assistance—52 of 68—to children, with special attention to returned migrants, adolescence and youth, special disabilities sector, pre-basic, basic, and third cycle education, primary family and community health care, water and sanitation, electrification and improvement of housing for families in extreme poverty situations, all in accordance with the BETTER LIFE PROGRAM;

• 2)

  Twenty percent (20%) to strengthen the social fabric under a prevention approach, promoting a culture of peace, justice and coexistence in municipal territories, in accordance with the ALL FOR PEACE PROGRAM, through the revitalization of public spaces to promote sports, cultural activities, training in values and human rights for citizenship, community surveillance, and in those other actions that allow addressing the particular conditions for violence prevention, so that in the short and medium term measurable and impactful results are achieved in the municipalities; and,

• 3)

  Ten percent (10%) to improve the municipal investment climate by promoting territorial competitiveness through productive infrastructure works, promoting the Micro, Small and Medium Enterprise (MIPYME) sector both rural and urban, for the generation of employment sources, administrative simplification processes, standardization of tax plans, municipal cadastres, strengthening of administrative, budgetary and treasury capacities, project execution, formulation of local economic development agendas, which are integrated with central government initiatives through the PRO-HONDURAS Program pursuing public-private partnerships, supporting the infrastructure of agricultural, tourism corridors and business development centers, among others. The Central Government shall promptly make transfers to Municipal Corporations on a monthly basis that ensure payment for the execution of programs and projects of municipal investment in social, economic, and security matters, including programs and projects of the better life platform, all for peace, and Pro Honduras. Municipal Corporations shall support the initiatives of the President of the Republic for connectivity of a better life by implementing community technology centers that promote human development;

• 4)

  One percent (1%) for the Municipal Transparency Fund (FTM) allocated to the Superior Court of Accounts (TSC), as municipal counterpart. Decision-making regarding the use and destinations of said funds shall be made through meetings of the Committee that has been created for this purpose, comprised of the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization who presides, the Association of Municipalities of Honduras (AMHON) with the position of Secretary, and the Superior Court of Accounts (TSC) who administers it; with these financial resources trainings, on-site Technical Assistance, monitoring, compliance with recommendations, and greater coverage of municipal audits shall be conducted. It is understood that while resources from other sources are identified to fulfill these obligations, the Superior Court of Accounts (TSC) shall formalize an agreement and regulation with the Committee members, with the purpose of jointly planning the activities to be developed in the Annual Operating Plan (POA) of the Municipal Transparency Fund Committee (CFTM); for these purposes the State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization shall proceed to establish the aforementioned Trust;

• 5)

  Fifteen percent (15%) for Own Administration Expenses; Municipal Corporations whose annual own income, excluding transfers that do not exceed FIVE HUNDRED THOUSAND LEMPIRAS (L.500,000.00), may allocate for said purposes up to twenty-nine percent (29%); and,

• 6)

  The remainder of resources shall be allocated to investment, to cover the counterpart required by organizations financing the projects; to payment of contributions to the Association of Municipalities of Honduras (AMHON), to payment of contributions that municipalities make to Associations or Joint Municipalities prior to decision by Municipal Corporations through the affirmative vote of two-thirds of their members, and for transfers in goods or services to organized communities for investment, and in all cases what is provided in Article 98 of the Municipalities Law must be respected. It should be understood that the expenditures described in items 1), 2), 3), and 6) above must be considered as an investment. Municipal Corporations that enjoy the economic benefit established in Decree No. 72-86 (Port Municipalities), dated May 20, 1986, may avail themselves of the regime established in this Article, provided they waive before the State Secretariat in the Office of Finance the benefit established in the aforementioned Decree. The State Secretariat in the Office of Finance is ordered, in relation to the Inter-institutional Agreement between the Association of Municipalities of Honduras (AMHON), Presidency of the Republic, State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization, and State Secretariat in the Offices of Development and Social Inclusion (SEDIS), dated June 8, 2015, to identify possible sources of financing for its compliance.

Authorization is granted to the State Secretariat in the Office of Finance, the State Secretariat of Human Rights, Justice, Governance and Decentralization, and the Association of Municipalities of Honduras (AMHON), to review and adjust for tax income, transfers, and payments that correspond to them in accordance with Law.

The State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization shall transfer in the form of monthly and advance installments to Municipal Corporations, through the Central Bank of Honduras (BCH), the amounts for Capital Contribution in accordance with the amounts listed in the General Budget of Income and Expenditures for Fiscal Year 2016, based on the budget approved by the National Congress; as well as that corresponding to port municipalities, provided that the municipalities prove having delivered to the State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization through the General Office of Local Strengthening (DGFL), administrative documents and accounting reports electronically to the Superior Court of Accounts, through the Local Government accounting report system (RENDICIONGL) in approved status. Municipal Corporations shall present to the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization, for the issuance of the opinion prior to the transfer, the following administrative documents:

• 1)

  Physical and financial progress of projects under execution no later than fifteen (15) days after the quarter ends, accumulated in physical and electronic form, through the RENDICIONGL tool;

• 2)

  The Annual Budget of Income and Expenditures for the current year, no later than January 31 of the same year. Municipalities that are registered with SEFIN for SAMI implementation must present the Annual Budget of Income and Expenditures with the single methodology of the public sector, and this must be entered and approved in the system. 3) The Municipal Investment Plan no later than January 31 of the same year; and, 4) Budgetary settlement of the previous year, no later than January 31 of the following year; this documentation shall be delivered in two original copies, one for the General Office of Local -- 54 of 68—Strengthening and the other for the Superior Court of Accounts (TSC). Regarding Accounting Reports: 1) Cumulative Quarterly Reporting in electronic and physical form through the RENDICIONGL tool, within a maximum of fifteen (15) days after the quarter ends; and, 2) Annual Accounting Report containing the fourteen (14) forms defined through the accounting report manual, no later than April 30 of the following year. SAMI Municipalities must carry out the SAMI export process to RENDICIONGL, and subsequently confirm the corresponding quarter to activate the APPROVED status and be able to present the required information to the competent institutions.

All administrative financial documents mentioned above shall be presented to the General Office of Local Strengthening (DGFL) of the State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization, in electronic and physical form in original document, attaching the certification of the point of the Municipal Corporation's approval record. The delivery date shall be the one that appears in the receipt stamp of the DGFL. The administrative financial documents shall be reviewed by the DGFL of the State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization, which within a period of thirty (30) days shall issue an opinion on them and shall notify the corresponding recommendations to the municipal corporation so that it performs the respective updates, implementations, modifications, or extensions and shall return them to the same office within a period of seven (7) days counted from receipt of the notification. Should it fail to do so, the DGFL shall not be able to issue the final opinion and therefore the municipality shall be causing the retention of the disbursement of the respective transfer. In order to substantiate the opinions and strengthen the culture of efficiency, effectiveness, and optimization of public resources, the National Banking and Insurance Commission (CNBS) must send to the DGFL of the State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization the detailed records of loans that municipalities have with the different banking and credit entities in the country, with the purpose of verifying the thirty percent (30%) percentage authorized by Article 157 of this Decree, to commit transfer funds to payments of bank loans. Similarly, all public and private institutions that transfer to Local Governments, funds under the concept of subsidies, bequests, and donations, must provide this information to the DGFL of the State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization, with the purpose of identifying the source of financing, use, and destination of these, which facilitate said Office in fulfilling the attributions established in Article 29 of the General Law of Public Administration in relation to: Overseeing, on behalf of the population, the compliance with the Vision of Country and Plan of Nation by the different executors, and coordination, liaison, supervision, and evaluation of departmental, municipal regimes, and Civil Society Organizations.

The State Secretariat in the Office of Human Rights, Justice, Governance and Decentralization is ordered to retain and transfer from the respective transfers granted to Municipal Corporations or port municipalities, the quotas in favor of:

• 1)

  Fire Department, one hundred percent (100%) of the amounts owed by the collecting municipalities of the Fire Service fee; in municipalities where this service exists provided that the fire department has exhausted the conciliation procedure to subscribe payment plans between both institutions. After the agreement is subscribed, non-compliance with one of the payment installments shall result in the application of the retention of the total amount owed from the following transfer, provided that the balances are reconciled by both institutions;

• 2)

  Association of Municipalities of Honduras (AMHON), calculated on one percent (1%) of actual municipal current income from the previous year;

• 3)

  Joint Municipalities, the amounts corresponding to statutory fees or contributions from Municipalities; prior to the application of retention, said organizations must present the document or other requirements established in the DGFL that substantiates the settlement or accounting report of all funds received from member municipalities;

• 4)

  Continue with the transfer of one percent (1%) that is deducted from the transfer to Municipalities; in accordance with Article 91 of the Municipalities Law; Municipal Corporations beneficiary of Decree No. 72-86 dated May 20, 1986 (4% or 8% of port municipalities), must contribute equally with one percent (1%) of their annual transfers, with the same purpose established in said Article. Said percentage must be credited to the Superior Court of Accounts (TSC) through Internal Resolution of the State Secretariat in the Office of Finance and using the automatic expansion procedure in the Integrated Financial Administration System (SIAFI), as disbursements to municipalities are made; and,

• 5)

  Honduran Social Investment Fund (FHIS) upon request thereof, the percentage corresponding to the local contribution of municipalities benefiting from projects financed with resources from loans and donations subscribed with international organizations, likewise, the amounts owed for non-compliance with Agreements and Contracts subscribed with the State financed with national funds. Such retention shall be applied to municipalities that fail to pay the municipal counterpart and Agreements and Contracts subscribed with the State.

Any debit made by the Central Bank of Honduras (BCH) to the General Treasury accounts for payments corresponding to those indicated in Article 156 of this Law shall be applied to the transfers listed in the General Budget of Income and Expenditures of the Republic.

Municipal Corporations may commit up to thirty percent (30%) of the transfer funds for the payment of loan installments, when it concerns financing works whose investment is recoverable and the debt is not greater than the government period; otherwise it must be approved by the National Congress.

In the case of the distribution and destination of the transfer established in the third paragraph of Article 91 of the Municipalities Law and specifically with the fifteen percent (15%) for annual administration expenses and that in the case of Municipal Corporations whose annual own income, excluding transfers, does not exceed Five Hundred Thousand Lempiras (L.500,000.00), may allocate for said purposes double this percentage. That is, twenty-nine percent (29%), shall be allocated for own administration expenses understood as administrative and operational expenses in equal parts, fifteen percent (15%) each, within the percentage of operational expenses consider thirty percent (30%) for salaries and wages, provided that it is proven that the annual current income received by the Municipality was increased in the same percentage.

In order to maintain a reliable and timely database on contingent debt, Municipal Corporations are obligated to provide to the State Secretariat in the Office of Finance, through the General Office of Public Credit, all information related to their public credit operations, such as: -- 56 of 68—loan agreements, issuance of securities, disbursements and debt service payments, which must be sent via fax, email, or other means no later than thirty (30) days after the operation occurs. Municipal Corporations and Joint Municipalities must incorporate themselves into the Integrated Municipal Administration System (SAMI), as the country's main tool for Local Governments, under the coordination of the State Secretariat in the Office of Finance with the technical support of the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization as the Institution that manages the local governments sector. Classes C and D Municipal Corporations are excepted, which shall gradually implement this system in accordance with a plan agreed upon between AMHON, the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization, and the State Secretariat in the Offices of Finance. In case of non-compliance with what is indicated in this Article, the State Secretariat in the Office of Finance is authorized to retain any type of payment or transfer in favor of the corresponding Municipality.

The transfers of port municipalities and municipal transfers that must be made during the year 2016 are exempt from any deduction except those obligations of the municipality arising from Income Tax, Social Security, and the National Institute of Pensions and Retirements for Employees of the Executive Power, deductions to its workers, and payments for public services in the concept of drinking water, electrical energy, telephone services, or any other public service of municipal corporations. SEFIN shall issue and send to each municipality within fifteen (15) days following the transfer the corresponding settlement and municipalities that do not agree must present their objections to the corresponding institutions and these shall resolve within the term of thirty (30) calendar days. Retentions made by SEFIN must be remitted to the corresponding institutions within a maximum period of five (5) business days, otherwise it shall assume the responsibility that corresponds in law, provided there are no pending accounts on the part of the service provider. Additionally, the State Secretariat in the Offices of Human Rights, Justice, Governance and Decentralization (SDHJGD) in coordination with SEFIN shall issue an annual settlement of the amounts transferred to municipalities and the amounts owed during the first fifteen (15) days of the month of January of each year.

The Budget, Treasury, Accounting, Public Credit, and Investment Subsystems in Local Governments shall be managed through the Integrated Municipal Administration System (SAMI), which shall be the official and mandatory use tool in the 298 municipalities of the country, which have a deadline to incorporate themselves gradually until the year 2018. Municipal Corporations that have subscribed an agreement and/or formalized the Implementation of the SAMI System must report accounts in said system, otherwise the Office of Municipal Strengthening of the State Secretariat of Human Rights, Justice, Governance and Decentralization (SDHJGD) shall not accredit the receipt of said Municipal Financial Administrative Documents and therefore shall not issue Final Opinion for the Management of the Municipal Transfer.

Based on the fiscal emergency established in Legislative Decree No. 18-2010 of March 28, 2010, containing the Fiscal and Financial Emergency Law, for Fiscal Year 2016 it is ordered to suspend Decree No. 368-2005, referring to the special monetary transfers authorized to the Municipal Corporations of the Central District and San Pedro Sula.

To grant for a term of validity of this Law amnesty to public servants, mayors, and aldermen for -- 57 of 68—the payment of interest calculated at the maximum average active rate that applies the national financial system on the amounts repaired by the Superior Court of Accounts (TSC) from the date in which the ruling became enforceable until the moment of payment made by the subject with civil responsibility, whether found in the administrative or jurisdictional proceedings; and that have or have not subscribed payment arrangements, for which the Attorney General of the Republic is authorized to conduct collection activities and make the respective payment agreements for a period of up to FIVE (5) years, according to the amount of the amounts repaired. Payment may be made in cash, certified check or cashier's check and in terms that the Attorney General of the Republic (PGR) agrees with the parties. XIV. IMPROVEMENT OF INCOME

State purchases of goods and/or services in which payment of Sales Tax is appropriate, the value thereof shall be retained in each payment document; this amount shall be remitted to the General Treasury of the Republic within ten (10) calendar days following the transaction. For purposes of the previous deadline, no Withholding Institution shall be able to use these resources to finance expenses of any nature. What is established in the previous paragraph is applicable both to Decentralized Institutions as well as Deconcentrated Institutions and all Project Executing Units without any exception, who as Withholding Agents must deliver to the provider of the goods and/or services the withholding receipt, so that they may accredit before the Executive Office of Income (DEI) the amounts paid for this concept. In the case of the Central Administration, the foregoing results in an automatic operation at the moment of making payment of the corresponding F-01 document.

When a State Institution must make any payment in favor of third parties, these must present proof of solvency in the payment of taxes and tax obligations, said proof must be issued by the Executive Office of Revenue (DEI). In case of not being solvent, the Public Institution shall apply the corresponding withholding.

Municipal Corporations shall require natural or legal persons with whom they have relations as suppliers of goods and services to present the National Tax Registration (RTN), prior to conducting any payment transaction.

The Public Enterprises referred to in Article 53 of the General Law of Public Administration, to determine the Income Tax for the fiscal period 2016, shall not be subject to the provisions of Article 22 A and its amendments contained in the Income Tax Law, but rather to the provisions of Article 22 of said Law. Likewise, Public Enterprises for the fiscal period 2016 shall not be subject to the Installment Payments determined by Article 34 of the Income Tax Law. XV. MISCELLANEOUS PROVISIONS

Amnesty is granted from fines for all Non-Governmental non-profit Associations and the Lenca Indigenous Organization of Honduras, communities, municipal associations until July 31, 2016 that have not submitted their financial and annual activity reports for 2015 to the Unit for Registration and Monitoring of Civil Associations (URSAC), a dependency of the Secretariat of State in the Offices of Human Rights, Justice, Governance and Decentralization, as a result of Ministerial Agreement No. 770-A-2003 dated September 10, 2003, without prejudice to what is established in the eighth provision of said Agreement. Non-Governmental non-profit Associations that have not submitted their reports or have failed to comply with Ministerial Agreement No. 770-A-2003, the URSAC, a dependency of the Secretariat of State in the Offices of Human Rights, Justice, Governance and Decentralization, shall proceed to cancel compulsorily and ex officio the legal status established in the Regulation of the Special Law for the Promotion of NGOs. The Secretariat of State in the Offices of Human Rights, Justice, Governance and Decentralization shall provide the necessary technological resources so that such institutions can register information online.

An amount of THREE HUNDRED MILLION LEMPIRAS EXACTLY (L.300,000,000.00) is allocated within the Budget of the Secretariat of State in the Office of Health, for the payment of labor benefits, which may not be transferred for any other purpose. Said amount is distributed as follows: ONE HUNDRED FIFTY MILLION LEMPIRAS (L.150,000,000.00) for the Technical and Administrative personnel of the Health Secretariat, ONE HUNDRED MILLION LEMPIRAS (L.100,000,000.00) for doctors and nursing personnel and payment of pending labor benefits and retirements of doctors as of the date, and FIFTY MILLION LEMPIRAS (L.50,000,000.00) for personnel of the Autonomous National Water and Sewerage Service (SANAA).

All institutions of the Central, Deconcentrated and Decentralized Government must register in the Integrated Financial Administration System (SIAFI), prior authorization of the Secretariat of General Coordination of Government, the readjustments to their Annual Operational Budget Plan within the following thirty (30) calendar days after the publication of the General Budget of Income and Expenses of the Republic, accompanied by its corresponding Annual Plan of Purchases and Contracting as a prerequisite for the allocation of the respective quota, both of external resources and of its national counterpart. Likewise, in order to ensure due transparency in the use of public resources destined for this purpose, the executing units shall send to the Institute of Access to Public Information (IAIP) and to the Regulatory Office of State Contracting and Acquisitions (ONCAE) such plans with the purpose that the latter incorporates them into the HONDUCOMPRAS portal. Similarly, they must send their Annual Plans of Purchases and Contracting, the State institutions that manage public funds and that do not execute their budget through SIAFI. In the case of programs and projects financed with external funds, they must be registered in the UEPEX module of SIAFI, for the respective financial monitoring.

The use of official vehicles during non-business hours and days is prohibited; the public servant who contravenes this provision and does not demonstrate to the competent authority the corresponding authorization or permit that supports its use, shall be suspended from his duties for a term of fifteen (15) days without pay, recidivism shall result in dismissal without any liability to the State. The authorization for the use of vehicles shall be granted only by the heads of the corresponding departments.

All vehicles owned by the State and by the municipalities that are assigned to the different institutions of the Central, Deconcentrated and Decentralized Government must be duly identified with the National Flag and the emblem or logo of the institution to which they belong; the Supreme Court of Accounts shall ensure strict compliance with this provision. The Supreme Court of Accounts shall present quarterly reports to the Budget Commission of the National Congress and to the Presidential Office on compliance with this Provision.

Officials who use personal security whose cost is covered by the State shall be limited to a maximum of two (2) persons. This provision does not apply to what is contemplated in Decree No. 323-2013 of January 15, 2014.

The official who holds the position of Nominating Authority or any other public official or employee is personally and jointly liable for negligence or carelessness that gives rise to judicial sentences that condemn the State and cause expenditures of financial resources.

It is prohibited to carry out works on buildings that are not the property of the State; however, conditioning may be performed in physical spaces that do not exceed ONE HUNDRED THOUSAND LEMPIRAS (L.100,000.00) annually in total. Conditioning shall be understood as those improvements that are not of a permanent nature and that allow physical spaces to be adapted to the needs of the institutions.

Institutions of the Central, Deconcentrated and Decentralized Government that require services such as those provided by Honduras Mail Companies (HONDUCOR), (ENAG), Honduran Telecommunications Company (HONDUTEL), National Supplier of Basic Products (BANASUPRO) and the Military Industry of the Armed Forces (IMFFAA), shall mandatorily request quotations for said services in those places where these companies have coverage, giving them preference to obtain them, if the prices were equal to or lower than those offered by other companies that operate in the market. For the sake of the principles of publicity, transparency and free competition, this requirement must be included in the notice of invitation or call that the institutions make. Prior to the procedure related to the acquisition of the services mentioned in the previous paragraph, Administrative Managers must verify that the departments requesting them provide the aforementioned quotations.

All institutions of the Central, Deconcentrated and Decentralized Government that currently have outstanding debts with the National Enterprise of Graphic Arts (ENAG), in the concept of publications in the Official Journal "La Gaceta" and for printing work must make the payment effective with their respective budget of Fiscal Year 2016. Non-compliance with these payments shall incur late interest and legal expenses.

When the Central Administration pays public services on account of municipalities or any other institution, that according to the Constitution of the Republic or other special Laws a percentage or value in concept of transfer corresponds, such amount must be charged to the corresponding budgetary credit, being considered as partial or total payment of the transfer as applicable.

Institutions of the Central, Deconcentrated and Decentralized Government are authorized to contract, charged to their respective budgets, individual fidelity bonds in favor of each natural person who administers public goods and resources, to protect the funds and assets of the State, with the Internal Audit units of each institution determining the amounts of such bonds. In the insurance contract, it shall be stipulated that the insurer shall charge bonded public officials and employees, payments made in favor of the State as a consequence of misuse and infidelity in the handling of public assets. Collection actions carried out by both the State and the insurance company shall be conducted in accordance with the reports rendered by the Internal Audit units of each institution and/or the Supreme Court of Accounts. The payment made by the insurance company in compensation for the infidelity of the public official or employee in the handling of public goods or resources does not exempt them from the civil, administrative or criminal liability that corresponds according to Law.

Without prejudice to what is established in Article 31, numeral 2), letter c) of the Tax Equity Law and the Regulations of these Provisions shall determine to which other officials are recognized the payment of cellular telephone service, as well as the maximum monthly limits authorized. When the official responsible for the use of the cellular phone exceeds the authorized consumption, the administration of each institution shall make the deduction from their respective assigned monthly salary.

In order to comply with the annual settlement of the General Budget of Income and Expenses of the Republic, the State Secretary in the Office of Finances is authorized to use, through the "Budget Modification Form", the available balances of allocations of various kinds that remain at the end of the Fiscal Year in the different State Secretaries and Decentralized Organisms, in order to carry out the budget expansions or creations that may be necessary. The available balances of budget allocations must be used at the end of the month of December, so as not to hinder the achievement of the objectives and goals established in the respective program and Annual Operating Plan.

In consonance with Article 118, numeral 1) of the Organic Law of the Budget, for purposes of prior control of budget execution, the State Secretary in the Office of Finances is instructed to continue with the function of control and monitoring of expenditure, for which personnel dependent on the State Secretaries of Health, Education, Infrastructure and Public Services, National Company of Electrical Energy (ENEE), Supreme Electoral Court, National Registry of Persons or in any other institution of the Central Government, Decentralized and Autonomous that circumstances warrant may be assigned. The budget delegates shall be assigned by the State Secretary in the Office of Finances in the different Administrative Management offices and have the power to review, prior to the acquisition of any commitment of goods and services, all procedural actions in order to verify if there is budget support and other necessary requirements for the realization of the expenditure, with emphasis on aspects related to the hiring of personnel and initial public works contracts and their respective expansions; for which they must mark as reviewed in the Integrated Financial Administration System (SIAFI) all documents that comply with legal requirements.

Resources allocated to cultural or social institutions not for profit must not be transferred to a purpose other than the one for which they were assigned or executed in favor of a beneficiary other than that of the transfer. For the first payment, the presentation of the annual disbursement plan and liquidation report of the funds executed in the previous Fiscal Year shall be required.

Leave in suspense Decrees Numbers 263-98 of October 30, 1998 and 311-98 of December 15, 1998, issued by the National Congress as a consequence of the natural disasters caused by Hurricane and Tropical Storm Mitch, and relating to the exemption of taxes, levies, fees and additional fees on goods and services.

Institutions, programs and projects related by their performance with services of assistance, protection and social development must incorporate the guidelines of the Policies of Social Protection and Comprehensive Development of Early Childhood in their Institutional Strategic Plans, as well as in their Operating Plans and corresponding Annual Budgets. The State Secretary in the Offices of Development and Social Inclusion shall be responsible for evaluating quarterly the compliance of commitments in matters of assistance and social protection provided for the population subject to care, for which it shall generate the corresponding evaluation instruments. Therefore, institutions, programs and projects must present within five (5) calendar days after the end of the quarter, a report of compliance with the Policies of Social Protection and Comprehensive Development of Early Childhood.

All public institutions are ordered, including Project and Program Executing Units, to apply the Regulation of Per Diems and Other Institutional Travel Expenses previously standardized to the Regulation of Per Diems and Other Travel Expenses for Officials and Employees of the Executive Power in force, approved through Executive Agreement Number 0696 of October 27, 2008. The values established in the Regulation of Per Diems and Other Travel Expenses of the Executive Power correspond to the maximum allocations, so institutions must adjust to the same and to those assigned in their Budgets. The Superior Court of Accounts shall verify compliance with this Article during the first quarter, sending a report to the Ordinary Budget Commission of the National Congress.

When Contracts, Agreements, Draft Decrees or any other legislative initiative are sent to the National Congress for approval, they must be forwarded in both physical and digital form to facilitate the projection at the time of their discussion and subsequent publication on the portal of this Power of the State.

The processes of acquisition of Insurance for the Central Government, Decentralized and Autonomous must be framed within the procedures established in the Law of State Contracting and the regulations issued by the National Commission of Banks and Insurance (CNBS). In compliance with what is established in Article 99 of the Law of Insurance and Reinsurance Institutions, the Public Institutes of Social Welfare are prohibited from directly contracting Insurance and Bonds on property of their ownership and those related to their credit portfolio through agents, brokers or brokerage companies.

Based on Article 9, fourth paragraph and Article 23, numeral 2 of the Organic Law of the Budget, it is established as a guiding instrument of medium-term fiscal policy for the period 2016-2019, which shall be updated annually in accordance with policy guidelines, the behavior of macroeconomic variables, the projected financial flows, as well as matters relating to projections of income and expenses of the Central Administration and the Non-Financial Public Sector. The Multi-Year Budget 2016-2019 is framed within the Law for the establishment of a Vision of Country and the adoption of a Plan of Nation for Honduras and is part of the General Budget of Income and Expenses of the Republic for the Fiscal Year 2016.

Extend the validity of Legislative Decree No. 18-2010 of March 28, 2010 containing the Law of Fiscal and Financial Emergency during the present Fiscal Year.

All institutions of the Central Government, Decentralized and Autonomous must be operating in the Integrated Financial Administration System (SIAFI).

Authorize the State Secretary in the Office of Finances to, after reconciliation of the amounts owed between institutions of the Legislative, Executive and Judicial Powers, carry out account compensations and, if necessary, affect through the "Budget Modification Form" the budget items approved in this Law. For the present Fiscal Year, the telephone service provided by HONDUTEL to the institutions of the Central Administration shall be compensated with the amount that it owes to the State for radioelectric license fees, rate for calls to the exterior (0.03 cents of Dollar), supervision fee, likewise the debt that exists with the DEI for taxes, among others.

Authorize the Honduran Institute of Tourism (IHT) to, under the modality of Public-Private Alliance (APP), request from the Commission for the Promotion of Public-Private Alliance (COALIANZA), the structuring and contracting of an operator to improve efficiency in the collection and application of the tourism fee of four percent (4%) at the national level, funds that must be allocated to the tourism sector with the purpose of significantly increasing current collection, expanding the base and thus promoting and fostering the self-sustainability of said Institute. These collected funds must be transferred immediately by the State Secretary in the Office of Finances to the Honduran Institute of Tourism (IHT) and shall be used expressly for promotion and development of Tourism of the Country; likewise, said amounts shall not be subject to freezing, nor budget cuts and are excluded from any other restriction that is applied to expenses financed with these resources, with the purpose of promoting the self-sustainability of the IHT, additionally the F01s generated from these incorporations must be prioritized by the General Treasury of the Republic within a maximum period of FIFTEEN (15) calendar days.

With the purpose that all institutions of the State comply with the provision contained in Article 25 of the Law for Promotion and Development of Competitiveness of micro, small and medium enterprises, as well as to expedite public investment, the same must expose the demands for Acquisition of works, goods and services, whose amounts do not exceed the limits for direct purchases and private auctions established in these Provisions, contained in their Annual Acquisition Plan and in the Operating Plan for 2016, through the use of reverse fairs.

The State Secretary's Office of Finance in coordination with the State Secretary's Office of Human Rights, Justice, Interior and Decentralization and the Superior Court of Accounts shall make available the uniform budgetary methodology of the Public Sector for Local Governments through the mandatory implementation of the Integrated Municipal Administration System, which will strengthen transparency mechanisms, improve the provision of local public services, strengthen their capacity in financial management matters and additionally the system will allow periodic accounts to be rendered electronically and promptly regarding budget liquidations for the calculation of transfer, as well as the liquidation thereof.

The José Cecilio del Valle dam (Nacaome) shall be administered by the National Electric Power Company (ENEE), the financial resources generated by its operation must be deposited in the sole account of the General Treasury of the Republic. The Finance Office is authorized to create the budget allocations for its operation. The foregoing shall take effect once the existing Contract between the State Secretary's Office of Despachos of Infrastructure and Public Services and the ELECNOR Company legally concludes.

For the purpose of compliance with the Budget Transparency and Accountability Indicators, the State Secretary's Office of Finance shall make available to the population in digital and printed form the following documents: during Formulation: Budget Policy Document 2016, Sectorial and Institutional Ceilings, Medium-Term Macro Fiscal Framework, Proposal of the General Budget of Income and Expenses of the Republic, the Citizen Budget; during Approval and Execution: Supporting Budget Documents of the Proposal established in Article 23 of the Organic Law of the Budget, Approved Budget, Quarterly Reports, Mid-year Review and Year-end Report.

The budget allocation approved in the budget of the State Secretary's Office of Defense specifically in Program 13 Naval Force for the lease with option to purchase of six (6) interceptor boats and two (2) patrol boats, may not be transferred nor used for any purpose other than payment of the obligation derived from the signed Contract.

The distribution of values or assets seized that are administered by the Office of Administration of Seized Assets (OABI) shall be distributed in accordance with the percentages established by Law and activities of Prevention and Protection of Women. The OABI shall report quarterly to the State Secretary's Office of Finance and to the Superior Court of Accounts (TSC) on the distribution of seized resources and the institutions receiving seized assets shall make the corresponding budget and accounting records in the Integrated Financial Administration System (SIAFI), for which the State Secretary's Office of Finance is authorized to perform the necessary operations.

Any obligation acquired by institutions of the Central, Deconcentrated and Decentralized Government, outside of the allocations approved in the General Budget of Income and Expenses of the Republic shall not be recognized as public debt nor registered in the Integrated Financial Administration System. The State Secretary's Office of Finance shall not process any request for budget modification for this purpose and is authorized to establish the pertinent regulations for the rejection thereof. Officials who authorize these obligations shall be jointly responsible for honoring the debts of these expenses.

Any Official of the Central, Deconcentrated and Decentralized Government responsible for the management of their approved budget allocation who exceeds the spending thereof shall be sufficient cause for dismissal and shall be disqualified from holding public office for a period of ten (10) years, without prejudice to actions that may be brought by the State controlling entities. The aforementioned sanction shall be executed by the President of the Republic, for which the established legal procedure must be exhausted.

The State Secretary's Office of Finance is not obligated to make any payment whose expense is not included in the respective breakdown at the level of Object of Expense in the General Budget of Income and Expenses of the Republic.

The State Secretary's Office of Education shall make adjustments to its POA – Budget no later than 30 business days after publication of this Law in order to implement educational reform as a priority and national necessity, as established in the Fundamental Education Law in its articles 31 to 35, 37 and 83; which implies the execution of a process of administrative, financial and human resource restructuring, to directly support the decentralization and operation of the Departmental, District and Municipal Directorates. To manage external cooperation resources based on the needs that arise from the application of the Fundamental Education Law and its Regulations. The State Secretary's Office of Finance and the State Secretary's Office of General Government Coordination shall follow up on this provision, likewise, the State Secretary's Office of Education shall submit quarterly reports to the Ad hoc Commission for education reform, to the Budget Commission and to the Monitoring Commission for Educational Reform of the National Congress.

The State Secretary's Office of Finance is empowered to through the National Directorate of National Assets proceed to sell at public auction national movable and immovable assets that provide no utility to the State, likewise the National Transit Directorate, Public Ministry and Supreme Court of Justice are instructed to comply with Decree No. 114-2007 as reformed regarding abandoned vehicles, the proceeds shall be allocated to payment of domestic debt.

The Executive Directorate of Income (DEI) is authorized to proceed with the direct sale of surplus merchandise from auction, fallen into abandonment in the various customs houses of the country, as well as in customs warehouses in the following cases: 1) Merchandise not awarded at public auction conducted by the Executive Directorate of Income (DEI), which due to its physical condition cannot be donated to state or public charity institutions; and, 2) Vehicles that entered national territory whose importation is prohibited by Law, in accordance with Article 21 of Decree 17-2010; excluding those covered by the Special Law on Abandonment of Motor Vehicles contained in Decree 245-2002 dated July 17, 2002, regarding vehicles that are in deposit in the courts of the Republic and other administrative instances. When the sale corresponds to vehicles, these must be sold in parts or as scrap, the buyer being obligated to assume the costs generated by disassembly into parts, which shall be carried out under the supervision of the Customs Authority. Prior to sale, the Customs Valuation Unit must issue the corresponding opinion on the value of the merchandise. No vehicle that has been sold in parts or as scrap may circulate in National territory, therefore the Executive Directorate of Income (DEI) shall not authorize the registration of the complete vehicle, but it may register the engine, chassis or cabin. The Executive Directorate of Income (DEI) within a period of twenty (20) days after the entry into force of this Decree must issue the Regulation of this Article.

The financial resources generated by the sale established in the previous Article shall be deposited in the Sole Account of the General Treasury of the Republic and shall be used to reinforce the budget allocation that was established in Article 170 of this Law and the State Secretary's Office of Finance is authorized to automatically increase the resources for this budget line item.

Without prejudice to what is established in Article 59 of Decree No. 17-2010, containing the Law for Strengthening Income, Social Equity and Rationalization of Public Spending, the State Secretary's Office of Foreign Relations and International Cooperation may lease or purchase Vehicles for the operation of Embassies, Consulates and Representations before International Organizations accredited abroad, according to the regulations established in each country. The cost of lease or purchase shall be financed from the operating expenses allocated to each Embassy, Consulate or representation.

The State Secretary's Office of Finance is authorized to continue the Solidarity Fund and Social Protection for Poverty Reduction in the General Budget of Income and Expenses of the Republic with the yields from the application of the Law of Ordering Public Finances, Control of Exemptions and Anti-evasion Measures. The yields of the aforementioned law shall be reviewed quarterly and as they are collected, they shall automatically be incorporated into the budget and allocated to such Fund until reaching four thousand five hundred million Lempiras (L.4,500,000,000.00), the values that are collected after completing this amount shall serve to finance programs and projects aimed at Health, Education, Security and Infrastructure and others related to Article 45 of Decree No. 278-2013. From the aforementioned fund, the Trusts financed by this Solidarity Fund and Social Protection for the Reduction of Extreme Poverty shall be increased to be executed by the Government of the Republic, as well as to finance the obligations derived from the application of said law.

Exempt the BCH from the payment of all types of duties related to the importation in the purchase of banknotes and bank coins.

For the purpose of optimizing the utilization of State resources during the present fiscal year, the different institutions of the Central Administration are prohibited from contracting advertising and propaganda. The resources for these purposes shall be centralized in the Budget of the Presidency of the Republic, which is the only authority authorized to execute and expand this budget line item. In the event that these services are required by institutions, they must submit the corresponding request to the President of the Republic.

Without prejudice to the limit established in Article 51 of the Organic Budget Law and for the purpose of expediting the investments of the Decentralized State Institutions, the Social Welfare Institutes and Financial Institutions are authorized, in accordance with their financial capacity, to carry out physical and financial investments with their own resources, under the regulation of the National Commission of Banks and Insurance (CNBS), and must incorporate the aforementioned resources into their respective Budgets for both Income and Expenditures.

The State Secretary in the Ministry of Finance is authorized to conduct, through the General Budget Office, the necessary registrations of operations inherent to the Trusts for Structuring, Financing and Development of Public-Private Partnership Projects, approved by Legislative Decree.

The use and administration of the funds from the Population Security Rate shall be applied in accordance with Legislative Decree No. 105-2011 and its amendments; favoring actions in support of women's security.

The State Secretary in the Ministry of Finance is authorized to transfer to the Single Treasury Account the total value of the bond whose maturity is scheduled to occur during Fiscal Year 2016, issued in favor of "Ministry of Finance-CORASUR" for a nominal value of SIX MILLION FOUR HUNDRED NINETY THOUSAND LEMPIRAS (L.6,490,000.00) plus accrued interest deposited in Account 111010200032-1 "MHCP Pro-Strengthening Trust Fund CORASUR" constituted for such purpose.

Purchases through Electronic Catalog, regardless of amount, acquisitions made through electronic catalogs shall be conducted through the issuance of a direct purchase order, which shall be generated in the Electronic Catalog module found in the National System of Procurement and Contracting "HONDUCOMPRAS". Purchases of goods or services available in the electronic catalog shall be null when these are conducted outside the system, unless authorized by ONCAE. The head of each institution that fails to comply with the foregoing shall be financially and jointly liable, without prejudice to civil, administrative, and criminal actions.

All institutions of the public sector must publish the entire process of selection of contractors, consultants, and suppliers in all its stages in the HONDUCOMPRAS system administered by ONCAE and the respective transparency portal of the institution, as of April 2016.

The Annual Plan of Procurement and Contracting (PACC) is mandatory for all entities, in accordance with what is established in the State Contracting Law and its regulation. For this purpose, ONCAE shall provide guidelines for the development of such plans. The PACCs must be sent to ONCAE no later than February 5, 2016, for purposes of its publication in HONDUCOMPRAS. They must likewise publish them on their respective transparency portal within the same time period. Non-compliance with the formulation of the PACC or its publication shall give rise to the corresponding administrative or civil responsibilities. For this purpose, ONCAE shall notify the TSC and the IAIP no later than February 29, the list of institutions that failed to comply with said obligation. All public investment contracts subject to the State Contracting Law or Efficient Procurement Law through Electronic Means that the Public Administration enters into, as well as their modifications, must be registered in the Contract Registration Module of the HONDUCOMPRAS System no later than 30 days after being executed and a certified copy of each contract shall be sent to the General Public Investment Office of the State Secretary in the Ministry of Finance.

The Honduran Institute of Science, Technology and Innovation (IHCIETI) is authorized to, for the purpose of promoting scientific research and economic development, finance research projects for graduate university students, social researchers, professionals, Universities and General Academy on priority topics or in areas affected by droughts or other natural disasters; likewise, contracting of professional services and consultancies of experts may be conducted, necessary to promote the scientific, technological, social, and economic development of the country.

The State Secretary in the Ministry of Finance is ordered to establish a trust in 2016 to promote and strengthen sports at the national level; whether through meritocracy, scholarships, sponsorships to national athletes or those proposed by their respective federations or by the Honduran Olympic Committee in the amount of FIFTY MILLION LEMPIRAS (L.50,000,000.00). To be a beneficiary of this trust shall be subject to analysis and approval by the Autonomous Sports Federation of Honduras and the Sports Commission of the National Congress, who shall publish the respective regulations.

Grant administrative amnesty until March 31, 2016 to responsible taxpayers and/or withholding agents, as well as Municipal Corporations, Inter-municipal Associations, and the Association of Municipalities of Honduras (AMHON), that are in default or have presented late the Annual Declaration of Sales Tax Credits (DAC), the Monthly Declaration of Withholdings (DMR), Informative Declaration of Tourist Rate of four percent (4%) or that have not updated their tax address, as well as administrative notifications such as: notification of start of operations, closure of operations, change of corporate name, and others related so that they comply with their administrative obligations with the Executive Revenue Office (DEI), free of the payment of penalties accrued as of December 31, 2015. Extend the validity period for the presentation of the Annual Informative Affidavit of Transfer Prices, from November 18, 2015 until March 31, 2016, for taxpayers, natural or legal persons obligated in accordance with Article 2 of Decree No. 232-2011 and its regulation, to present their declaration exempt from penalties, interest, and surcharges. This provision shall be effective immediately upon its approval in the National Congress of the Republic.

The permanent appointments of Teachers, Teaching Managers, and Teaching Technicians are suspended in the State Secretary in the Ministry of Education for the year 2016, while the new Departmental Directors of Education have not been appointed, selected through Civil Service Competition based on the Fundamental Education Law and its Regulations. Therefore, the Departmental Directors of Education must establish the Selection Committees in compliance with the Regulation of Departmental Education Committees. So that they may proceed to call a competition in the first quarter of 2016, the State Secretary in the Ministry of Education shall finance it with its Budget.

The State Secretary in the Ministry of Finance is authorized to deduct the fees or contributions that public sector institutions by law transfer to INFOP in order to make them directly to said institution.

The Executive Branch through the State Secretary in the Ministry of Finance shall regulate the present General Provisions within a period of thirty (30) days, counted from the effective date of this Law.

From the Budget Allocation approved in favor of the Honduran Telecommunications Company (HONDUTEL), authorization is granted to make effective the payment to the National Institute of Pensions and Retirement Benefits of Employees and Officials of the Executive Branch (INJUPEMP), any outstanding balance as of December 31, 2015 for the concept of contributions, current and overdue interest in order to guarantee to its contributors the enjoyment of their rights.

Grant amnesty for the concepts of fines, surcharges, and late-payment interest on obligations invoiced by the National Company of Electric Energy (ENEE) and pending payment as of November 30, 2015. The amnesty shall become effective if the subscribers make payment of the debts no later than March 31, 2016.

Exempt from the Sales Tax the Association Friends of the National Institute of the Thorax during the year 2016, exclusively for the acquisition and strict purchase of the Philips Allura Xper FD10 Angiography Equipment.

This Decree shall enter into force as of the day of its publication in the Official Gazette "La Gaceta". Given in the city of Tegucigalpa, Municipality of the Central District, in the Session Hall of the National Congress, on the Seventeenth day of the month of December of the year Two Thousand Fifteen. ANTONIO CÉSAR RIVERA CALLEJAS PRESIDENT MARIO ALONSO PÉREZ LÓPEZ SECRETARY JOSÉ TOMÁS ZAMBRANO MOLINA SECRETARY To the Executive Branch Therefore: Let it be published. Tegucigalpa, M.D.C., December 18, 2015. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE OFFICE OF FINANCE WILFREDO RAFAEL CERRATO RODRÍGUEZ