VIII- BRINGING DOWN LEGAL BARRIERS

8.1 The Rural Land Tax (ITR)
8.2 The Expedited Procedure Law
8.3 The Gun License Law
8.4 Bills Under Discussion
8.5 The Fight Against Violence and Impunity

Brazil's agrarian legislation is the origin of the majority of the country's land conflicts, of the slowness with which the government conducts land expropriation, of the lack of ownership titles, and of the judicial system's sluggishness in dealing with land matters. Conceived more to protect large property holdings than to guarantee the rights of small farmers, agrarian legislation is outdated, deficient and full of loopholes easily exploited to impede the administration of justice in the countryside.

Since last year, however, this legal framework favoring the strong, to the detriment of those who really need the State's protection, has begun to unravel.

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8.1 The Rural Land Tax

Created by the Land Statute in 1964, the Rural Land Tax (ITR) should have helped to reverse the landownership concentration and should have been an instrument of fiscal justice in the countryside: the more land a proprietor owned, the more he should have paid, proportionally, in taxes. The less productive the land, the higher the rate. Nevertheless, the exact opposite occurred.

The high degree of under-taxation, tax evasion and non-payment by the large landowners have made the ITR completely ineffective. Worse: over time it has become a powerful instrument of fiscal injustice in the countryside. Since it is a declared tax -- the proprietor declares the value of his unimproved land, the level of use and productivity -- the landowner has always found a way to get the maximum ITR reduction, which is 90% of the total tax bill.

The resulting distortions are scandalous: a) the declared value for unimproved land -- VTN -- is always much less than the market value. Studies demonstrate that, in the last decade, the percentage of the VTN to the real price of the land varied from 20% for properties of less than 10 hectares, to 1.2% for large properties of more than 10,000 hectares; b) the declared productive area is much less than the real productive area, with the larger properties claiming around 50%, on average, while smaller properties declare 94%; c) the declaration of productivity is even more unreal: there have been cases, registered by INCRA for its calculation of the ITR, in which the declared productivity per hectare was more than ten times as much as the average ascertained by the IBGE.

The result is that the small landowners always paid, proportionally, much more tax than the large landowners. Moreover, the small proprietors were the ones who paid the ITR. The massive non-payment was concentrated among the large proprietors who, even though they owed little, never paid the tax.

The current government fought to change this situation and, in December 1996, with massive public support, including from opposition parties, it obtained from the National Congress substantial changes in the system for calculating the ITR, to wit:

1. The ITR rates for large and unproductive properties were radically increased: from a maximum rate of 4.5% for properties of more than 15,000 hectares, to 20% for properties over 5,000 hectares -- an increase of more than 500% in some cases.
2. The division of properties by size, for the purpose of calculating the tax, changed also; the zones were enlarged and their number was reduced by half: from twelve to six (see the following tables).

TABLE 27

3. The old rates varied also depending on the region. There was one general table and two differentiated tables. The latter were for 1) municipalities of the so-called drought polygon (in the northeast) and of the eastern Amazon, and 2) for the western Amazon region and the Pantanal of Mato Grosso and Mato Grosso do Sul (see tables). With the new law, this situation was changed and the rates apply to all rural properties, regardless of the region in which they are located.

TABLE 28

4. Another substantial change is that the value declared by the owner, for payment of the ITR, will be taken into account by INCRA in case of the land's eventual expropriation. In this way, not only is the rate higher, but also the tax base will be larger. The risk of expropriation induces the landowner to declare the market value of his land, rather than a much lower price.

TABLE 29

The ITR rate increase seeks to stimulate rational use of the land and to force the sale or the surrender of large unproductive properties to the government for the agrarian reform program. Properties with a low level of use will pay a high tax. Thus, for example, a rural property of more than 5,000 hectares, with less than 30% of its land begin used, will have a 20% tax rate. In practice, this means that the owner of the property will pay, in five years, a tax that equals the value of the property.

Thus, the approval of the new ITR represents an end to the purchase of land for speculation. The new tax on unproductive lands will leave owners only two options: begin producing or sell the land.

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8.2 The Expedited Procedure Law

In December 1996, the government presented to the National Congress a proposed change in Implementing Law 76/1993, known as the expedited procedure law, that addresses the process of rural property expropriation for agrarian reform purposes. The proposal won approval that same month.

According to the new law, when the judge issues the initial expropriation petition, he will, within 48 hours, instruct the government to take possession of the land once it has proven that it has made the judicial deposit to pay for the improvements and has issued the Agrarian Debt Bonds (Títulos da Dívida Agrária - TDA) to pay for the unimproved land.

Under the previous law, the judge would authorize only the court deposit corresponding to the price offered, but he wouldn't order the seizure of the land. With the expedited procedure, the deposit is made at the time of the initial petition and the judge determines the seizure immediately or within 24 hours. This new procedure accelerates the expropriation action and prevents the lawyers of the landowners from interrupting the process to obtain, in the courts, a more favorable indemnization for the land, at the cost of the public treasury and of the taxpayers. The judicial disputes used to drag on for years, at times even decades, and the landowners would get exorbitant payments, through a process riddled with errors.

In addition to correcting these problems, the new law also eliminates one of the principal reasons for land conflicts in Brazil, which occur precisely during the period between the decision of expropriation and the seizure. Indignant with the delay in the process, landless families that were to be resettled on the expropriated area encamped around the property or invaded the land, entering into conflict with the landowners and their employees. Now, a landowner's legal appeal will not impede the government's seizure of the land.

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8.3 The Gun License Law

For more than 50 years, the illegal carriage of weapons in Brazil was treated as only a minor infraction. A new law passed by the National Congress in February 1997 makes it a crime punishable by imprisonment.

In addition to defining crimes, the new law standardizes the norms for gun registration and carriage. The most significant decision was the creation of the National Firearms System (Sistema Nacional de Armas - SINARM), the main objective of which is to create a national registry of the guns in circulation in Brazil. Gun owners will have six months to register their weapons.

To increase public safety, the new legislation restricts the carriage of firearms. From now on, authorization to carry a firearm will be temporary and will depend on proof of one's fitness, social behavior, need for a firearm, technical ability, and psychological competence for using a weapon.

With this, the government has all the legal support necessary to unleash an ample and effective disarmament operation, en masse, in the countryside. It will disarm the landowners and their employees as well as the landless, principally in the areas of greatest social tension and potential for armed conflict. In 1996 alone, 47 people died in land conflicts in Brazil, 31 of them in the state of Pará.

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8.4 Bills Under Discussion

In addition to the legislation already approved, the National Congress is discussing dozens of other projects aimed at improving, directly or indirectly, the agrarian reform process. The most important among them are:

• The project that changes the Civil Legal Code, giving jurisdiction to the Public Ministry to intervene in class action lawsuits involving landownership and in which there is a public interest. It allows the Public Ministry to monitor the lawsuits even before the legal proceedings begin. It has been confirmed that the greatest irregularities and gravest offenses to the rights of citizens occur at that early stage of a case. If the bill is approved, the Public Ministry will function as the guardian of the public rights of citizens against the economic interests that normally dominate the lawsuits.
• The project that institutes a legal review of the values assigned to rural properties expropriated for agrarian reform purposes. Its objective is to allow the government to question and to recalculate the values of the properties in view of the large number of legal decisions that fix indemnizations that are exorbitantly higher than market prices. These decisions are a frontal assault on the limits of reason and a clear violation of the constitutional principle of "just indemnization" (Federal Constitution, Article 5, XXIV).
• The project that impedes the subdivision of properties potentially subject to expropriation for agrarian reform purposes. It determines that, once INCRA has concluded its survey of the rural property for expropriation, the subdivision, sale, donation and exchange of the property are forbidden for a two-year period. The past failure to prohibit the subdivision of property selected for agrarian reform has enabled the owners, seeking to impede the government's action, to donate, exchange, transfer or divide the land into small- and medium-sized holdings that are not suitable for expropriation.

In addition, it would prevent attempts to disguise the real degree of the land's use and would permit issuance of the public notice that must precede INCRA's inspection of the land. This item is important because there have been a lot of cases in which the entire expropriation process was annulled by the courts because the owner was not notified in person about the forthcoming inspection. In many cases, personal notification is impossible, because the owner lives in a hard-to-reach locale or because he does not reside in the state in which the property is located.

If all these necessary changes to Brazil's agrarian reform legislation are approved, they will increase tremendously the government's power to act and to democratize landownership in a peaceful and rapid way, and with majority support from society.

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8.5 The Fight Against Violence and Impunity

Much of the violence in the countryside is related to land conflicts. This is a familiar and recurring scene: the landless, sometimes armed, invade a property; the owner takes up arms to defend himself; the military police at times act inappropriately; the Military Court does not punish the excesses and the crimes committed by military police; the Federal Court is unable to judge human rights violations. These are some of the ingredients of the rural violence syndrome that has increased with the growing number of land conflicts in the last few years.

Preoccupied with this situation, which offends Brazil's democratic spirit and its desire to see an effective and legal agrarian reform, the government has taken the following measures:

1. Sanctioned Law No. 9,432, of February 20, 1997, which creates the National Firearms System and establishes conditions for the registration and carriage of firearms. The law seeks to guarantee the legal basis for disarming the countryside, from wherever threats of violence come.
2. Transferred jurisdiction from the military courts to the civil courts over crimes committed by military police. Law No. 9,299, of August 7, 1996, is only a first step in that direction. Therefore, a new project was presented.
3. Sanctioned Law No. 9,455, of April 7, 1997, which defines crimes of torture.
4. Proposed Constitutional Amendment No. 368/96 to give the Federal Court jurisdiction over crimes that violate human rights.