Fabio Appendino, Marina Ferrara and Paulo Honório de Castro Júnior

On 28th, 29th and 30th of December, 2011, certain laws were enacted by the States of Minas Gerais, Pará and Amapá creating a new fee called TFRM on mining activities (Fee of Control, Monitoring and Supervision of Mining Activities, Exploration and Exploitation of Mineral Resources). Such laws have also created a State Register for storing information regarding mining activities, called CERM (State Register of Control, Monitoring and Supervision of Mining Activities, Exploration and Exploitation of Mineral Resources).

The effective date of the Law enacted by the State of Minas Gerais is 27th of March and 1st of April, 2012, for the laws created by the States of Pará and Amapá.

The new fee was created to reimburse the States for the cost incurred due to the exercise of their police power, understood as the supervision of mining activities in their territories. The State's activities financed with the revenues generated from this fee are those concerning the planning of use and management of mineral resources, registration, control and supervision of mining concessions, as well as environmental protection.

In the case of the States of Pará and Amapá, the fee will be charged based on the multiplication of three Fiscal Units of Reference per ton of ore mined. On the other hand, the law enacted by the State of Minas Gerais states that the fee will be charged based on the multiplication of one Fiscal Unit of Reference per ton of ore mined. Currently, the Fiscal Unit of Reference of the States of Minas Gerais, Pará and Amapá are respectively R$ 2.3291, R$ 2.3020 and R$ 1.5035.

The small and very small businesses dedicated to mining activities are exempt from the fee in the State of Pará and Amapá. On the other hand, the law enacted by the State of Minas Gerais determines that companies with gross income equal or below than 1.650.000 Fiscal Unit of Reference (approximately R$ 3,8 million) are exempt from the fee and, also, the companies which exploit mineral resources to be industrialized in the State of Minas Gerais and those located within SUDENE (Superintendency for the Development of the Northeast) area.

Furthermore, the creation of the CERM (State Register of Control, Monitoring and Supervision of Mining Activities, Exploration and Exploitation of Mineral Resources) by such laws aims to maintain and consolidate data to support public policy decisions relating to the exploration and exploitation of mineral resources. The registration with the new State Register is mandatory and the taxpayers will be required to provide, among other data, information pertaining to acts of permits, concessions, changes in mineral reserves, characteristics of the mineral resources and the destination given to them.

It is also worth mentioning that the States of Minas Gerais and Pará have recently published the Decrees 45.936/2012 and 386/2012, respectively, with the purpose of regulating several aspects of the new fee, such as deadlines, how and which information is required to be registered with the CERM, how to assess the fee credit, reduction of the fee burden depending on the type of the mineral resources exploited etc.

This article intends to briefly point out the major constitutional defects we found in such laws and decrees.

Firstly, the Constitution does not authorize the States to create a fee in order to reimburse themselves for the cost incurred in the exercise of their police power, understood as the supervision of mining activities in their territories. Only the Federal Government has power to supervise mining activities, since it is the only entity constitutionally authorized to legislate on this matter.

Moreover, such laws list general State's activities among those which cost will be reimbursed through the fee, such as economic planning and development of public policies. In the absence of a specific and divisible state activity the fee is unconstitutional, once the general State’s activities must be financed by taxes' revenue.

Another relevant point is that the law enacted by the State of Minas Gerais specifically lists the supervision of the environment as one of the activities financed by the new fee. However, this activity is already financed by the revenue of another fee, called Environmental Inspection Fee (TFAMG). That means the State is already being reimbursed, which empties the new fee purpose and, consequently, reveals its unconstitutionality.

Finally, the laws are also unconstitutional because of the lack of correspondence between the amount of the fees and the cost of the State activities being financed. The calculation basis, fixed as the variation of Fiscal Units per ton of ore mined, is not proportional to the cost incurred by the States. No study has been made on this cost, being unreasonable and arbitrary the basis for calculating the new fee.

On these grounds, we understand that taxpayers affected by those new fees have solid arguments to plea in the Judiciary their right to not pay it, since they are unconstitutional.

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* Fabio Appendino, Marina Ferrara and Paulo Honório de Castro Júnior are lawyers at Rolim, Viotti & Leite Campos Advogados.

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