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Public Policies

Bill 529 and state foundations

The FAPESP board of trustees recently analyzed Bill 529, submitted by the São Paulo state government to the Brazilian legislative assembly. The bill, which aims to address the decline in state public finances as a result of the pandemic, would enable the use of “financial surplus” recorded by state foundations and authorities in 2019. For FAPESP, this would amount to approximately R$560 million. At the end of 2019, however, FAPESP’s commitments to research projects, scholarships, business innovation programs, centers of excellence, and others, totaled R$1.6 billion, due to the multi-annual nature of the projects that the foundation funds. The board of trustees therefore considers it a technical error to treat the “financial surplus” as an excess resource. These sums are needed to fulfill commitments already assumed in an environment where revenue relies on state tax collection, which varies depending on economic activity levels. In the last five years, FAPESP received a total of R$5.7 billion from the state treasury and spent a total of R$6.2 billion, with historical reserves covering the shortfall. The board of trustees believes the bill fails to consider FAPESP’s unique situation, with funding provided via article 271 of the state constitution. If passed in the proposed form, this law will jeopardize the foundation’s ability to fulfill obligations it has already assumed and may result in the need to suspend research, development, and innovation activities, putting the state’s economic recovery, and consequently, the generation of jobs, at risk. FAPESP actively participates in improving the economic, cultural, scientific, and social environment. One example is the partnership between the foundation and the Butantan Institute, through which R$32.5 million will be invested in clinical trials of the Coronavac COVID-19 vaccine, immunogenicity studies, and support for the Brazilian Health Regulatory Agency (ANVISA). In a statement issued on August 20, the board of trustees affirmed its willingness to help reassess the suitability and legality of the measure established in the bill.