The President of the Federal Court (STF), Minister Edson Fachin, extended until March 2026 the provisional validity of the provisions which deal with the distribution criteria of the State Participation Fund (FPE).
The measure was adopted to avoid a regulatory vacuum and the interruption of transfers to the states and the Federal District, in the absence of a new law approved by the National Congress.
The decision of Fachin, who acts as a minister on duty, was rendered in the judgment of Direct Action of Unconstitutionality (ADI) 5.069, in which the STF recognized the unconstitutionality of certain articles of the Complementary Law No. 62/1989, amended by LC No. 143/2013, but modulated the effects of the agreement to temporarily maintain the distribution rules.
As the deadline would expire on December 31, 2025 without Parliament adopting new legislation, Fachin understood that it was necessary to extend, in an exceptional manner, the effectiveness of the rules, in order to guarantee legal certainty and the continuity of the flow of resources to the federated entities.
“The persistence of this factual situation from January 1, 2026 could give rise to serious legal insecurity for the Union and the States, due to the absence of criteria to follow for the distribution of EPF resources by the Union. It also generates worrying uncertainty as to the amounts to be collected, which could constitute serious harm to State finances and public policies,” Fachin wrote in a decision rendered on December 31.
The minister continued: “Such circumstances are therefore consistent with the determinations of the judgment rendered by this Federal Supreme Court and, above all, with the constitutional requirements concerning Brazilian federalism.”
AGU
Before Fachin set the extension until March 1, the Attorney General’s Office (AGU) sent a request to the STF to warn it of the risk of legal uncertainty and the cessation of FPE transfers from January.
In its request, the Union argued that, without the adoption of a new law by Congress, the public administration would be forced to transfer resources to the States without having valid legal criteria for distribution, which could compromise the regularity of transfers and the financing of essential public services.
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