Law on Complementary Income in Rural and Urban Marginal Areas

This Law is of public order and social interest and declares as a matter of national priority the complementation of income for the population of rural and urban-marginal zones of the country, through the execution of projects that promote the improvement of their living conditions; the improvement of the natural resource base in the benefited zones; and conservation of the environment and the reduction of vulnerability to natural disasters, the improvement of food security, the creation of new capacities and sustainable economic development in communities, with the subsequent purpose of protecting and improving the income level of persons.

For the purposes of this Law, the following terms are defined: RURAL ZONE: A population unit of no more than two thousand (2,000) inhabitants and the geographic space characterized by its relative difficulty of access, where primary activities are generally developed, deficient in public services, low population density, absence of employment sources and therefore, scarce human development. URBAN-MARGINAL ZONE: A specific area located on the periphery of cities, characterized by deficiencies in access to public services and formal employment opportunities, economically depressed, normally formed with informal possession of the housing area. REGULATING ENTITY: An organism that defines the methodological, operational, monitoring and evaluation guidelines that ensure compliance with this Law and the programs, projects and activities inherent to it; composed in an inter-institutional manner by the Secretaries of State in the Offices of Social Development, Interior and Justice, Finance, Labor and Social Security and Planning. SERVICE PROVISION AGREEMENT: A commitment acquired by a citizen beneficiary of this Law, for the provision of a service for a determined period of time, in exchange for complementary income. COMPLEMENTARY INCOME: Economic compensation that shall be received by persons who execute or carry out the activities of the projects, the amount of which shall be established by the Secretary of State in the Office of Social Development; to define this compensation, the variables and technical criteria proposed by each project to be carried out shall be taken as a basis.

The methodological, operational, and monitoring and evaluation guidelines that allow ensuring success in the execution of the proposed programs, projects and activities shall be the responsibility of a Regulating Entity whose functioning shall be developed in the respective Regulation and constituted by the State in the Offices of Social Development, which shall preside over it, Interior and Justice, Finance, Labor and Social Security, and Planning.

The Secretary of State in the Office of Social Development shall coordinate with entities of the Central Government, decentralized and autonomous agencies, municipalities, NGOs, civil associations, inter-municipal associations and residents, the execution of projects, with the purpose of guaranteeing to one member of each household, complementary income for at least one hundred twenty (120) days per year, in the poorest rural and urban communities of the country developing social work in the projects that are carried out under this regulation, in accordance with the eligibility criteria of the Regulating Entity.

The targeting and prioritization of the zones and projects to be executed shall be done annually by the Secretary of State in the Office of Social Development, in accordance with the criteria established by the Regulating Entity.

The targeted and prioritized projects shall preferably be executed in the seasons when there is less employment opportunity in the main productive activities of each Municipality or Community, thereby ensuring that its residents can secure their means of livelihood and subsistence during such periods of precariousness. Nevertheless, at any other time, projects that are considered of urgent importance and necessity, as demanded by the Community, may be executed.

For the application of this Law, the following activities or categories of community and social work are established for which the Government of the Republic shall promote, encourage and manage their financing:

• 1)

  Construction and rehabilitation of infrastructure, mainly roads and pathways, irrigation works and flood control, infrastructure for physical education, sports, recreation and health services, cleaning of drainage systems and dredging of ravines, construction of recreational spaces, oxidation pits for coffee processing wastewater in coffee-producing zones, paving of streets, laundry areas and similar works;

• 2)

  Health education, drinking water and sanitation;

• 3)

  Rural and urban reforestation, prevention of forest fires, forest management and conservation of water sources;

• 4)

  Demarcation and delimitation of protected zones, their core zones and buffer zones;

• 5)

  Firewood collection centers;

• 6)

  Cleaning of river banks, beaches and water bodies;

• 7)

  Maintenance of electrical transmission lines;

• 8)

  Production and collection of stone and aggregate materials for local supply of materials;

• 9)

  Road conservation, cleaning of vehicular roads and communities;

• 10)

  Construction and maintenance of infrastructure to promote rural tourism;

• 11)

  Provision of daily care services with emphasis on early development and nutritional monitoring for children from birth until five (5) years of age;

• 12)

  Improvement, rehabilitation and construction of housing;

• 13)

  Prevention and eradication of environmentally-related diseases;

• 14)

  Construction and maintenance of public centers and buildings;

• 15)

  Cleaning and improvement of cemeteries and public markets;

• 16)

  Recycling of solid waste;

• 17)

  Early recovery actions that facilitate the mitigation of negative social and economic impacts of natural disasters;

• 18)

  Programs aimed at income generation and care for persons with disabilities and elderly persons; and,

• 19)

  Any others that affect the improvement of living conditions in communities, the expansion of the natural resource base in the benefited zones and/or their sustainable economic, social and environmental development.

The execution of the projects shall be the responsibility of municipal governments and legally recognized social organizations and those in the process of legalization, in accordance with the technical capacity of each of them, which may request technical, administrative support and supervision from the inter-municipal associations to which they belong and organizations authorized for this purpose. Once a project is initiated, the Executing Entity shall be subject to permanent social audit through an Ad Hoc Oversight Board, elected by the Assembly of the Social Organization that has the greatest representation in the Community, who shall report to the Secretary of State in the Office of Social Development, without prejudice to the interventions and inspections carried out for each project by the State control entities. The Regulating Entity, through the Secretary of State in the Office of Social Development and other competent institutions, shall collaborate with municipalities and legally recognized social organizations in strengthening administrative and management capacities, aimed at improving the execution of projects regulated by this Law.

The eligible projects subject to execution shall be formalized in writing, through the execution of service provision agreements with the respective offer of unskilled local labor required for their execution, which may be financed with resources from the following sources:

• 1)

  With resources allocated and executed by the Secretary of State in the Office of Social Development;

• 2)

  With resources allocated to other public or private institutions for the execution of projects in the prioritized zones;

• 3)

  With funds corresponding to counterparts of local unskilled labor in projects executed by municipalities and other entities;

• 4)

  Funds from projects financed by private sector institutions under Corporate Social Responsibility policies; and,

• 5)

  With resources from a common fund, which shall be capitalized with resources from governmental and non-governmental entities and external cooperation, which shall be administered in accordance with the Regulation that the Secretary of State in the Office of Social Development shall issue for this purpose. The financing of projects executed under this Law shall comprise, in addition to income complementation for unskilled local labor services as a priority, the necessary resources for the purchase of materials, rental of machinery, purchase of tools or work instruments, payment of skilled labor, training of project beneficiaries and any other input that may be required, as applicable.

The projects included in the approach of this Law, which are executed jointly or separately by the Secretaries of State in the Offices of Health and Public Works, Transport and Housing (SOPTRAVI), the Honduran Social Investment Fund (FHIS), the Honduran Institute for Children and Families (IHNFA), the Permanent Contingency Commission (COPECO), National Institute of Forest Conservation and Development, Protected Areas and Wildlife (ICF), the Secretary of State in the Offices of Agriculture and Livestock (SAG), Municipal Governments or any other public or non-governmental entity, must be coordinated with the Secretary of State in the Office of Social Development. The Regulation of this Law shall establish the procedures to be followed to achieve better coordination of the aforementioned actions.

For the development of the activities described in Article 7 of this Law, collaboration in financing micro-enterprises that are or may be formed exclusively by residents of the benefited communities may be provided, in coordination with the Municipal Corporations. For this purpose, it shall be required that the operation of micro-enterprises created or to be created be totally or partially sustainable with the income they generate.

The Secretary of State in the Office of Social Development, in coordination with Municipal Governments, resident patrons, civil organizations existing in the zone and communities, shall prioritize and target the execution of projects, programs or public investment instruments, taking into account the following criteria:

• 1)

  Technical feasibility;

• 2)

  Compatibility with the Country Vision and the National Plan and the development and territorial planning plans of municipalities, inter-municipal associations, departments or regions;

• 3)

  Community needs, expressed by residents and/or prioritized in local development plans;

• 4)

  Generation of opportunities that generate income temporarily and/or permanently;

• 5)

  Social and economic impact on communities, natural resources; and prevention of the threat of diseases or pandemics in the country or in the Community. The procedure by which the Secretary of State in the Office of Social Development shall approve the programs and projects to be executed under this Law shall be established in the respective Regulation.

The Secretary of State in the Office of Social Development shall determine the amounts that beneficiaries of this Law shall receive for income complementation, taking as reference the measure of income earned by unskilled labor workers in the zones in question and facilitating the self-selection of beneficiaries according to the criteria established by said Secretary.

The Regulating Entity shall determine the eligibility and selection criteria applicable to persons wishing to offer their unskilled labor in the projects contemplated under this Law, taking into consideration and fully observing the applicable international prescriptions in matters of human rights. The Secretary of State in the Office of Social Development shall receive all necessary collaboration from public entities that handle information on other income complementation or social protection programs.

In projects for child care centers, elderly persons, persons with disabilities, laundries and other services to communities, construction and/or rehabilitation works of real property owned by private parties may be carried out, provided that their titleholders agree with the Community on the long-term use eligible.

In programs and projects of external cooperation in which national counterparts consist, in whole or in part, of the provision of local labor services, these may be implemented through service provision agreements, as established by this Law, without prejudice to what is established in the conventions or agreements for the implementation of projects and programs.

The financing of this Law shall be as follows:

• 1)

  An annual amount from the General Budget of Income and Expenditures of the Republic that may not be less than THIRTY MILLION LEMPIRAS (L.30,000,000.00);

• 2)

  With the transfer of the remainders from programs and projects financed with national funds and external cooperation; and,

• 3)

  The funds that the Executing Entity manages to expand the coverage of the purpose of this Law. The transfer of the remainders set forth in this Law are mandatory for compliance by the State Secretariat in the Office of Finance and the executing entities of programs and projects of the Government of the Republic, except in cases where this process is expressly contrary to norms established in the conventions or financing contracts.

The State Secretariat in the Office of Social Development shall establish the administrative structure necessary for the proper supervision of the projects related in Article 7 of this Law and the comprehensive evaluation of the policy. Likewise, it is empowered to implement a national program of income supplementation, whose effect may establish public policies on the matter and shall conduct all pertinent proceedings for obtaining resources for the development of said projects, being able to coordinate joint implementation strategies and co-financing of projects with local governments and other public or private entities.

The State Secretariat in the Office of Social Development in coordination with the members of the Regulatory Entity shall issue the Regulations of this Law within thirty (30) days following its publication.

This Law 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 eighteenth day of the month of July of two thousand ten. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT RIGOBERTO CHANG CASTILLO SECRETARY GLADIS AURORA LÓPEZ CALDERÓN SECRETARY To the Executive Branch. Therefore, Let it be Executed. Tegucigalpa, M.D.C., August 17, 2010 PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC THE STATE SECRETARY IN THE OFFICE OF SOCIAL DEVELOPMENT HILDA ROSARIO HERNÁNDEZ ALVARADO State Secretariat in the Office of Security AGREEMENT NUMBER 023-2010 THE CONSTITUTIONAL PRESIDENT OF THE REPUBLIC CONSIDERING: That the President of the Republic has the general administration of the State, among his powers are those to issue agreements and Decrees and issue regulations and resolutions in accordance with the Law, in addition to directing the economic and financial policy of the State. CONSIDERING: That on December 15, 2009, Agreement No. 019-2009 was issued, published in the Official Gazette La Gaceta, with the primary purpose of authorizing the State Secretariat in the Office of Finance, to enter into a convention for the distribution and sale of customs forms and seals or stamps, with the State Secretariat in the Office of Security so that it, with the proceeds of the income obtained from the services, acquires the property where the Eagles Nest Educational Center is located. CONSIDERING: The Constitution of the Republic in Article 363 establishes: "All ordinary fiscal income shall constitute a single fund. No income may be created intended for a specific purpose. Nevertheless, the Law may assign income to the service of public debt and provide that the proceeds of certain taxes and general contributions be divided between the National Treasury and that of the municipalities, in previously designated proportions or amounts. The Law may also, in accordance with planned policy, authorize certain state or mixed enterprises to perceive, manage or invest financial resources from the exercise of economic activities that correspond to them". For the foregoing, it follows that the content of the Agreement