THE PRESIDENT OF THE REPUBLIC, I hereby make known that the National Congress decrees and I sanction the following Law:

Art. 1º

This Law updates the legal framework of basic sanitation and amends Law 9,984, of July 17, 2000, to grant the National Water and Basic Sanitation Agency (ANA) competence to issue reference standards for the regulation of public basic sanitation services; Law 10,768, of November 19, 2003, to change the name and duties of the Water Resources Specialist position; Law 11,107, of April 6, 2005, to prohibit the provision under a program contract of the public services referred to in Art. 175 of the Federal Constitution; Law 11,445, of January 5, 2007, to improve the structural conditions of basic sanitation in the country; Law 12,305, of August 2, 2010, to provide for deadlines for the environmentally sound final disposal of residues; Law 13,089, of January 12, 2015 (Statute of the Metropolis), to extend its scope to regional units; and Law 13,529, of December 4, 2017, to authorize the Federal Government to participate in a fund whose sole purpose is to finance specialized technical services.

Art. 2º

The preamble of Law 9,984, of July 17, 2000, shall be in force with the following wording:

"Provides for the creation of the National Water and Basic Sanitation Agency (ANA), a federal entity for the implementation of the National Water Resources Policy, member of the National Water Resources Management System (Singreh) and responsible for issuing reference standards for the regulation of public basic sanitation services."

Art. 3º

Law 9,984, of July 17, 2000, shall be in force with the following amendments:

Rewrites Art. 1º to incorporate the authority to issue reference standards for the regulation of public basic sanitation services. Rewrites Art. 3º creating the National Water and Basic Sanitation Agency (ANA), a special-regime autarchy, linked to the Ministry of Regional Development, with the purpose of implementing the National Water Resources Policy and issuing reference standards for the regulation of public basic sanitation services.

Adds to Art. 4º items XXIII (declare a critical situation of quantitative or qualitative water resource scarcity) and XXIV (establish and enforce water use rules during the term of the critical situation declaration), as well as the corresponding paragraphs.

Adds Art. 4º-A, which grants ANA the authority to issue reference standards for the regulation of public basic sanitation services by their holders and their regulatory and oversight entities, subject to relevant federal legislation, especially Laws 6,766, of December 19, 1979, 8,987, of February 13, 1995, 11,107, of April 6, 2005, 11,445, of January 5, 2007, and 14,026, of July 15, 2020.

ANA's reference standards address, among other topics: quality and efficiency standards in the provision, maintenance and operation of systems; tariff regulation, with a view to promoting rational use of resources and economic-financial balance; standardization of contractual instruments; universalization targets that ensure service to the entire population; criteria for regulatory accounting; progressive reduction and control of water loss; methodology for calculating any indemnity related to reversible assets not yet amortized.

Art. 4º

The preamble of Law 10,768, of November 19, 2003, shall be in force with the following wording:

"Provides for the Staff Framework of the National Water and Basic Sanitation Agency (ANA) and other measures."

Art. 5º

Law 10,768, of November 19, 2003, shall be in force with the following amendments:

Reorganizes the staff framework of ANA: it now includes the positions of Specialist in Water Resources and Basic Sanitation, Specialist in Geoprocessing and Administrative Analyst, all reserved to Brazilian nationals, under statutory legal regime and with duties redefined to encompass the new regulatory authority over sanitation.

Art. 6º

The preamble of Law 11,445, of January 5, 2007, shall be in force with the following wording:

"Establishes the national guidelines for basic sanitation; creates the Interministerial Committee on Basic Sanitation; amends Laws 6,766, of December 19, 1979, 8,666, of June 21, 1993, and 8,987, of February 13, 1995; and repeals Law 6,528, of May 11, 1978."

Art. 7º

Law 11,445, of January 5, 2007, shall be in force with the following amendments:

Core of the reform. Establishes that the holder of public basic sanitation services (Municipality or Federal District) must, among other measures, organize regionalized provision under Art. 3º-A, observe ANA reference standards, prove the economic-financial capacity of the provider, and ensure universal service within the targets and indicators set by regulation.

Adds Art. 3º-A of Law 11.445, which defines the modalities of regionalized provision: metropolitan region, urban agglomeration or microregion (established by the States); basic sanitation regional unit (URS, established by the State and composed of Municipalities grouped according to technical and socio-economic criteria); reference block (established by the Federal Government, formally created by act of the federal Executive Branch and composed of Municipalities not included in the previous modalities).

Gives new wording to Art. 10 of Law 11.445: the provision of public basic sanitation services by an entity that does not form part of the holder's administration depends on the conclusion of a concession contract through prior bidding, under the terms of Art. 175 of the Federal Constitution, prohibiting its regulation through a program contract, agreement, partnership term or other instruments of precarious nature.

Adds Art. 10-B: contracts in force must provide for universalization targets ensuring service to 99% of the population with potable water and 90% of the population with sewage collection and treatment by December 31, 2033, as well as quantitative targets of non-intermittence of supply, loss reduction and improvement of treatment processes.

Adds Art. 11-B: contracts for the provision of public basic sanitation services shall define universalization targets ensuring service to 99% (ninety-nine per cent) of the population with potable water and 90% (ninety per cent) of the population with sewage collection and treatment by December 31, 2033, as well as quantitative targets of non-intermittence of supply, loss reduction and improvement of treatment processes. (Core of the universalization target)

§ 9º of Art. 11-B. Exceptionally, upon request of the holder, ANA may authorize the extension of the deadlines provided for in the caput of this article until January 1, 2040, provided that meeting the targets is shown to be technically or financially unfeasible and provided that it applies solely to regionalized provision blocks that do not have sufficient demographic density and financial capacity to fund such investments, or that are located in low-income peripheral regions.

Adds Art. 10-A: the concession contract shall expressly contain, on pain of nullity, the targets for expansion, quality and efficiency, the possible impacts of the targets on the tariff, the review criteria and procedures, the payment mechanisms for the provider, the obligation to render accounts and the oversight procedures.

Rewrites Art. 50 of Law 11.445 to condition the allocation of non-reimbursable federal resources in the sector on compliance with ANA reference standards, on adherence to a regionalized form of provision, on observance of universalization targets, and on proof of the economic-financial capacity of the provider.

Art. 8º

Law 11,107, of April 6, 2005, shall be in force with the following amendments:

Prohibits the conclusion of a program contract for the provision of the public services referred to in Art. 175 of the Federal Constitution by an entity that does not form part of the holder's administration. Program contracts entered into until the publication of Law 14.026 remain in force until their contractual term, but do not allow automatic renewal.

Art. 9º

The preamble of Law 13,089, of January 12, 2015, shall be in force with the following wording:

"Establishes the Statute of the Metropolis, amends Law 10,257, of July 10, 2001, and provides other measures."

Art. 10

Law 13,089, of January 12, 2015, shall be in force with the following amendments:

Extends the scope of the Statute of the Metropolis to the regional units established by the States, integrating it into the new regionalized sanitation provision model. Defines public functions of common interest and the Integrated Urban Development Plan (PDUI) also for the URSs.

Art. 11

Law 13,529, of December 4, 2017, shall be in force with the following amendments:

Authorizes the Federal Government to participate in a fund whose sole purpose is to finance specialized technical services dedicated to structuring concession and public-private partnership projects in basic sanitation. This fund, operated by Caixa and BNDES, is the support vehicle for Municipalities that lack the technical capacity to internally structure the concession of their services.

Art. 12

The transformation, without increase in expenditure, by act of the federal Executive Branch, of positions in the Senior Management and Advisory Group (DAS) with total remuneration values corresponding to the following, is hereby authorized:

1. 4 (four) Executive Management Commissioned Positions (CGE), of which 2 (two) CGE I and 2 (two) CGE III;
2. 12 (twelve) Technical Commissioned Positions (CCT) V;
3. 10 (ten) Technical Commissioned Positions (CCT) II.

Art. 13

A Decree shall provide for the technical and financial support of the Federal Government to the adaptation of public basic sanitation services to the provisions of this Law, observing the following stages:

1. adherence by the holder to a regionalized provision mechanism;
2. structuring of regionalized provision governance;
3. preparation or updating of regional basic sanitation plans, which shall take into account urban and rural settings;
4. modeling of service provision in each block, urban and rural, based on technical, economic and environmental feasibility studies (EVTEA);
5. amendment of program contracts in force, with a view to transitioning to the new provision model;
6. bidding for the concession of services or for the alienation of the controlling stake of the state-owned provider, with the replacement of all contracts in force.

§ 1º If the transition referred to in item V of the caput of this article requires the replacement of contracts with different terms, these may be shortened or extended so that the end date converges with the start of the definitive concession contract, observing that: I, in the case of a shortened term, the provider shall be indemnified pursuant to Art. 37 of Law 8,987, of February 13, 1995; and II, in the case of an extended term, an extraordinary review shall be carried out, where necessary, pursuant to item II of the caput of Art. 38 of Law 11,445, of January 5, 2007.

§ 2º Federal support shall be conditional on a commitment by the service holder to complete the stages referred to in the caput of this article, who shall reimburse the expenses incurred in case of non-compliance with that commitment.

§ 3º In the provision of public basic sanitation services, Municipalities that obtain approval of the Executive Branch, in concession cases, and of the respective Municipal Council, in privatization cases, shall have priority in obtaining federal public resources for the preparation of the municipal basic sanitation plan.

§ 4º Holders that elect a regulatory entity of another federative entity shall have priority in obtaining federal public resources for the preparation of the municipal basic sanitation plan.

Art. 14

In the event of alienation of the controlling stake of a public company or mixed-capital company providing public basic sanitation services, the program or concession contracts in execution may be replaced by new concession contracts, observing, where applicable, the State Privatization Program.

§ 1º If the controller of the public company or mixed-capital company does not request a change to the term, object or other clauses of the contract at the time of alienation, subject to § 1º of Art. 11-B of Law 11,445, of January 5, 2007, the prior consent of the alienation by the public entities that formalized the program contract is waived.

§ 2º If the controller of the public company or mixed-capital company proposes changes to the term, object or other clauses of the contract referred to in this article before its alienation, a proposal for replacement of the existing contracts shall be submitted to the public entities that formalized the program contract.

§ 3º The public entities that formalized the program contract shall have a period of 180 (one hundred and eighty) days, counted from receipt of the communication of the proposal referred to in § 2º of this article, to express their decision.

§ 4º The decision referred to in § 3º of this article shall be made by the public entity that formalized the program contract with the public companies and mixed-capital companies.

§ 5º The failure of the public entities that formalized the program contract to express themselves within the period established in § 3º of this article shall constitute consent to the proposal referred to in § 2º of this article.

§ 6º (VETOED)

§ 7º (VETOED)

Art. 15

The competence referred to in § 3º of Art. 52 of Law 11,445, of January 5, 2007, shall be exercised only if the basic sanitation regional units are not established by the State within 1 (one) year from the publication of this Law.

Art. 16 (VETOED)

Art. 17

Concession contracts and program contracts for the provision of public basic sanitation services existing on the date of publication of this Law shall remain in force until the expiration of their contractual term.

Sole paragraph. (VETOED)

Art. 18

Public-private partnership contracts or sub-concession contracts that have been signed through bidding procedures shall be maintained by the new controller in the event of alienation of control of a state-owned enterprise or mixed-capital company.

Sole paragraph. The public-private partnerships and sub-concessions provided for in this article shall be maintained in terms and conditions by the federative entity holding the delegated competence, through direct contractual succession.

Art. 19

The holders of public basic sanitation services shall publish their basic sanitation plans by December 31, 2022, maintain control and provide publicity regarding their compliance, and communicate the respective data to ANA for inclusion in Sinisa.

Sole paragraph. The studies underlying the concession or privatization shall be considered basic sanitation plans, provided that they meet the required legal requirements.

Art. 20 (VETOED)

Art. 21 (VETOED)

Art. 22 (VETOED)

Art. 23

The following are hereby repealed:

1. § 2º of Art. 4º of Law 9,984, of July 17, 2000;
2. § 1º (former sole paragraph) of Art. 3º of Law 10,768, of November 19, 2003;
3. the following provisions of Law 11,107, of April 6, 2005:
   1. § 1º of Art. 12;
   2. § 6º of Art. 13;
4. the following provisions of Law 11,445, of January 5, 2007:
   1. §§ 1º and 2º of Art. 10;
   2. Arts. 14, 15 and 16;
   3. items I and II of the caput of Art. 21;
   4. item I of the caput of Art. 31;
   5. item I of the caput of Art. 35;
5. the following provisions of Law 13,529, of December 4, 2017:
   1. the sole paragraph of Art. 1º;
   2. § 3º of Art. 4º.

Art. 24

This Law enters into force on the date of its publication.

Brasília, July 15, 2020; 199th of Independence and 132nd of the Republic.

JAIR MESSIAS BOLSONARO
André Luiz de Almeida Mendonça
Paulo Guedes
Tarcisio Gomes de Freitas
Ricardo de Aquino Salles

This text does not replace the one published in the Official Federal Gazette of July 16, 2020.