Legislative Update: Reform of the Administrative Procedure Law

On August 12, the bill to reform the Administrative Procedure Law (LPA - Law 9,784, of 1999) was approved. The bill, which received approval in two rounds by the Temporary Committee for Examination of Bills to Reform National Administrative and Tax Procedures (CTIADMTR), will now go to the Chamber of Deputies, provided that there are no appeals requesting analysis in the Plenary.

Bill 2,481/2022 is part of a series of legislative proposals related to tax and administrative issues, developed by the Commission of Jurists (CJADMTR) in 2022. This commission was established with the objective of modernizing the tax administrative process in Brazil. The texts prepared were later presented as bills in the Senate.

Among the main proposed changes, the expansion of the application of the LPA to include municipalities, states and the Federal District, in addition to the direct and indirect federal administration, stands out. As a result, the law will be called the National Statute for the Standardization of Administrative Procedures. This change is relevant, considering that both the Superior Court of Justice and the Supreme Federal Court have applied federal legislation in cases of omission or divergence of municipal and state laws.

Technological Innovations and Artificial Intelligence

The reform introduces an important innovation by introducing a chapter that regulates the electronic administrative process. According to the new text, administrative processes should preferably be conducted electronically, ensuring greater accessibility and speed for interested parties. In cases where electronic means are unavailable or unfeasible, the acts may be carried out in physical form, provided that they are subsequently digitized.

The use of artificial intelligence models in the context of electronic administrative processes must follow principles of transparency, predictability and auditability. It is essential that interested parties are informed in advance about the use of these technologies and that there are mechanisms for reviewing the data and results produced. The protection of personal data and the correction of discriminatory biases are also priorities, ensuring that algorithms do not produce unequal results based on characteristics such as race or gender.

Artificial intelligence models should preferably use open codes, facilitate integration with systems from other public bodies and allow development in collaborative environments.

Procedural Legal Business and Alternative Dispute Resolution Methods

Another highlight is the introduction of the possibility of negotiation with the administered party, aiming at satisfying the public interest. This instrument, called administrative procedural legal business, allows the procedure to be adjusted to the specificities of each case, including establishing a calendar for the practice of procedural acts.

The project also encourages the adoption of alternative methods for resolving conflicts, such as mediation, negotiation, dispute resolution committee and arbitration, provided that there is agreement between the parties involved.

Procedures and Deadlines in the Administrative Process

The deadline for the preparation of administrative proceedings was set at 60 days, with the possibility of extension upon justification. The text also determines that both the public consultation and the public hearing must be published on the websites of the respective entities or bodies. The public hearing may be held in person, remotely or in a hybrid format.

Furthermore, the new legislation provides that the failure or refusal of the authority to decide within the deadline will transfer the competence to a higher authority, without prejudice to the person responsible for the delay. Recurrent failure may be countered with action plans required by any interested party.

Review and Cancellation of Administrative Acts

The new text contains important provisions regarding the cancellation of public tenders, public competitions and other procedures. When there are more than ten people affected, interested parties may be notified by publication in the Official Gazette and on the institution's website. Regarding the revocation of administrative acts, the reform allows the effects to be produced at a future date, and not immediately, as is currently the case.

The legislation also reinforces that the right to annul administrative acts that benefit the recipients has a period of five years, except in cases of bad faith, in which case the period will be ten years. The authority may also restrict or postpone the effects of the nullity or suspend the execution of the act during the annulment process to avoid significant losses.

Procedural Deadlines and Sanctions

Procedural deadlines will be counted in business days, and no longer in calendar days. The legislation prohibits the requirement of a bond for the filing of administrative appeals, unless provided for in specific legislation.

For administrative sanctioning processes, the project highlights the importance of internal integrity mechanisms and the possibility of preliminary investigation to determine illicit acts, including based on anonymous complaints. This procedure must be concluded within 12 months, with the possibility of an extension for another six months.

Change in the Administrative Misconduct Law

An amendment presented by Senator Izalci Lucas (PL-DF) proposes classifying access to financial data of civil servants or related persons before the formalization of the process as abuse of authority. This amendment was accepted, and the change will be incorporated into the Administrative Misconduct Law (Law 8,429, of 1992).

Other Related Approvals

In the same session, the draft of new rules for the federal tax administrative process (PL 2,483/2022) and the draft of the new Tax Enforcement Law (PL 2,488/2022) were approved. Both projects received substitutes from the rapporteur, Senator Efraim Filho.