Mexico: Decree That Reforms, Supplements And Derogates Certain Dispositions Of The Constitution Of The United Mexican States, In Financial Discipline Matters Of States And Municipalities

Last Updated: 3 July 2015
Article by Galicia Abogados
  • The Permanent Commission issued the declaration of constitutionality of the reform in financial discipline matters of states and municipalities on May 6, 2015.

On May 26, 2015, the Decree that reforms, supplements and derogates certain dispositions of the Constitution of the United Mexican States (the "Constitution"), in financial discipline matters of states and municipalities was published (the "Decree") in the Official Gazette of the Federation ("DOF"), which entered into force on May 27, 2015. Herein we present a brief summary of such publication.

I. Background

The legislative process for the approval of the Decree lasted more than 2 years and had its origin in the debts contracted by several states of Mexico. The initiative was originated by the Chamber of Deputies in 2013 and concluded with the approval of 24 states: Aguascalientes, Baja California, Campeche, Chiapas, Chihuahua, Coahuila, Colima, Durango, Guanajuato, Hidalgo, Jalisco, México, Morelos, Nayarit, Nuevo León, Puebla, Querétaro, Quintana Roo, San Luis Potosí, Sinaloa, Sonora, Tamaulipas, Veracruz and Zacatecas. Notwithstanding, the approval and enactment of secondary laws will be pending. There is a time limit of 90 days to issue the Regulatory Law in Fiscal Accountability matters (the "Regulatory Law") and 180 days starting after the Regulatory Law enters into force, for the states to amend the state laws.

II. Principle of stability of the public finances

Pursuant to the Decree, the principle of stability of the public finances is incorporated in the Constitution and its consideration in the system of planning of democratic development.

III. Powers of the Congress

The powers of the Congress in public finances matters are strengthened under the argument that public indebtedness of the states is of national interest. The Congress shall be in charge of issuing the terms and conditions of loans or guarantees over the credit of the Nation. It is also in charge of approving such loans and, in its case, of paying the public debt.

Each year, the Congress shall approve the maximal amount of indebtedness, which will be included in the Income Law and will set forth the general terms for the indebtedness of states, municipalities and the Federal District.

Finally, the Congress will set a bicameral commission to analyse the agreements that the states and municipalities desire to execute with the Federal Government to obtain guarantees. In the case of states and municipalities with a high level of indebtedness this commission shall have 15 days to issue its observations.

IV. Restrictions to loans

Public borrowing shall be restricted to (i) the execution of works that directly produce an increase in the public revenues; (ii) loans with purposes of monetary regulation; (iii) loans obtained during an emergency declared by the President pursuant to Article 29 of the Constitution; and (iv) refinancing or restructuring debts, which shall be performed under better market conditions.

The Regulatory Law shall include the terms and conditions of public borrowing that shall be contracted by public bidding, as well as the mechanisms to assure obtaining better market conditions.

For purposes of local governments, the maximal amount of public borrowing shall be approved by two thirds vote of local deputies and it is strictly prohibited to use such public borrowing as current expenditure.

V. Public Registry, reports and sanctions

The Decree sets forth the creation of a public registry in which the states, the Federal District and the municipalities shall publish all its loans and payment obligations. The registry shall include at least the following information: debtor, lender, amount, interest rate, term, type of guarantee or source of payment, as well as any other information deemed necessary.

During the period prior to the establishment of the aforementioned registry, the obligors shall send to the competent commissions of the Congress, (i) a report about their obligations and loans pursuant to article 9 of the Tax Coordination Law (Ley de Coordinación Fiscal) in a term not exceeding 30 days (before June 26, 2015) and (ii) a quarterly report with the information about their registered loans and obligations, including the information regarding if such loans were used to refinance or restructure existing debts.

Local Congresses shall conduct and audit about the obligations of the public sector and make the results available in a term not exceeding 90 days (before August 25, 2015).

The Congress shall set an alarm system about the debt management and shall establish in the regulations the sanctions to public servants that do not fulfill such dispositions.

VI. Short-term obligations

The reform sets forth that the states and municipalities may contract short-term obligations without requiring the approval of local congresses if they do not exceed the limits and fulfil the conditions determined by the regulations to be approved. Such obligations should be fulfilled and terminated at least 3 months before ending the governmental term. During the last 3 months of the governmental term, no loan shall be contracted.

VII. Conclusions

One of the benefits of the reform is the transparency in the management of public finances. The lenders of public entities will be certain about the term in which they will recover their credit. This could generate lower interest rates in the future.

The reform strengthens the constitutional provision about the inspection activities in contracting and application of resources from public borrowing in the state, local and federal levels.

The due issuance and respect of the Regulatory Law in treasury matters, as well as the local legislation is still pending.

Finally, the obligations acquired by the states and municipalities with third parties prior to entering into force of the Decree, shall be deemed valid in the terms of the applicable dispositions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.