Capítulo X. Disposiciones transitorias y derogatorias

The initial period of the members of the Board of Directors must be subject to these rules;

a). The members appointed by the President of the Republic, principal and alternate, must serve six years in their offices;

b). The members appointed by the Monetary Board of the Bank of Guatemala, principal and alternate, must serve five years in their offices;

c). The members appointed by the Superior Council of the Autonomous University of San Carlos of Guatemala, principal and alternate, must serve four years in their offices;

d). The members appointed by the Official College of Physicians and Surgeons, principal and alternate, must serve three years in their offices;

e). The members appointed by the employers' associations or unions, principals and alternate, must serve two years in their offices; and,

f). The members appointed by the workers' unions, principal and alternate, must serve one year in their offices.

At the expiration of each of those initial staggered periods, the corresponding election must be made for a period of six years, as article 7 orders, in such a way that on each successive occasion only one principal member and one alternate member are renewed.

The first Board of Directors must be constituted within the sixty days following the entry into force of this law.

While the Official College of Physicians and Surgeons is not constituted, the appointment of the members of the Board of Directors to which subsection d) of article 4 refers must be made by the system of direct voting, in which all those who legally practice the respective professions in the territory of the Republic may participate.

For this purpose, the rules of subsection b) of article 10 must be followed, insofar as they are applicable by analogy, and each person with the right to vote who wishes to exercise this faculty must send to the Management, within the non-extendable term of twenty days to which the said subsection refers and by certified mail, a sealed envelope that must contain a signed note in which he must express the names and surnames of his two candidates, one for principal and one for alternate, together with the documents or references that it is possible for him to provide as proof that they meet the requirements that the present law determines.

The President of the Republic, by agreement issued through the Ministry of Economy and Labor, must designate, within the ten days following the entry into force of this law, the first general manager of the Institute.

For this time, and thereafter in the judgment of the Board of Directors, a person who is not a Guatemalan by birth may be appointed general manager, provided that the technical orientation of the Institute so requires and that it is convenient for the better development of the labors of the latter.

The first deputy general manager must only be appointed when the Board of Directors, unanimously, and on the proposal of the general manager, considers that the development of the activities of the Institute and the needs of the service so require.

The same rule must be observed for the appointment of the other deputy general managers.

Within the twenty days following the entry into force of this law, the Executive Branch must place at the order of the Institute the sum that for that purpose is disbursed, with the purpose of covering all the expenses of organization, of study, of installation of offices and others conducive to the initiation of the application of one or some classes of benefits to the sectors of population and of the national territory that technique advises.

The said sum must be deposited in the Bank of Guatemala, and the general manager may only draw against it once the Board of Directors is constituted, for the purpose that the disbursements are made in accordance with the budget that the latter approves and publishes in the Official Gazette.

If, once the application of one or some classes of benefits has begun, some surplus of the said sum remains, it must be credited to the first contribution of the State as such and as employer, in the terms of article 8.

The technical council must be constituted within the ninety days following the date of entry into force of this law, at least with the advisers that are necessary for the initiation of the labors of the Institute.

Once the superior organs of the Institute are constituted, the Board of Directors of the latter is empowered to contract loans or to authorize the issuance of bonds or securities placeable on the internal market and, if it were necessary, abroad, without exceeding five million quetzales or, as the case may be, the equivalent of that sum in United States of North America dollars.

The said loans or issuance must be made in each case in accordance with the needs and gradual development of the social security regime; both the former and the latter must be guaranteed with the resources or income of the Institute, and their conditions of term, interest and amortization must be as favorable as possible.

For this purpose, the Bank of Guatemala, in its character of adviser, fiscal agent and banker of the State, through its Monetary Board, must examine and, as the case may be, approve the respective operation, as well as the other details of the loan or issuance; and to facilitate the attainment of the said loans or the placement of the aforementioned bonds or securities, the said Bank must grant all the cooperation that is necessary, in accordance with its constituent Law.

The product of the aforementioned loans or issuance must be invested exclusively in;

a). The complete construction (inclusive location of the land, acquisition of the latter, purchase of instruments and equipment, and other analogous questions) of the hospitals, clinics, laboratories, pharmacies and institutions of similar service that the good functioning of the social security regime requires;

b). The construction and equipment of the buildings that are necessary to install the central offices and the branches of the Institute, inclusive the location and purchase of the respective lands; and,

c). The other works related directly to the purposes of the Institute, that the Board of Directors determines unanimously, on the proposal of the general manager and with the recommendation of the respective technicians.

While the taxes to which article 40 refers are not created or determined, the Ministry of Finance and Public Credit must include in the annual draft of the national budget of income and expenditures the sum that the Institute indicates, in accordance with the actuarial estimates that are made for that purpose.

The total of the said sum must be placed at the order of the Institute at the beginning of each fiscal year and, in order that the latter always receives the exact contribution of the State that corresponds to it as such and as employer, the rules of the said article 40 must be observed.

With the purpose of avoiding an unjust duplication of economic burdens for employers, the latter have the right to request the Institute, in accordance as their respective workers are being included within the social security regime, that it declare fulfilled by them the obligations that the Constitution or other laws different from the present one impose on them, for the provision of benefits equal or equivalent to those that the said Institute grants.

The Institute must determine in each case, at the request of the interested parties, the proportion in which the aforementioned substitution of obligations must be made and the nature of the latter, in accordance with the class or classes of benefits that at that moment the social security regime grants to the workers in question.

While the Institute does not extend some of its services to the entire territory of the Republic and does not cover the entire working class, it must require the employers not obligated to contribute to the social security system at a given time, through the means it deems convenient and in accordance with the result of its technical studies and with what the respective regulations indicate, to adopt for the benefit of their workers a minimum of protective measures and of benefits in kind or in money compatible with the fundamental needs of said workers, with the possibilities of said employers and of the national economy, and with the purposes of this law.

From the date on which the application of this law begins, Decree number 669 or Protective Law of Workers and its regulations are repealed in the entirety of the national territory, and, from the date of entry into force of the former, the other legal provisions that oppose it.

This law must enter into force on the day of its publication in the Official Gazette.

Within thirty days following its entry into force, the Executive Branch may issue, by way of regulation, all the other transitional provisions that the better organization and functioning of the Institute demand and that have been omitted in this chapter.

Forward to the Executive for its publication and compliance. Given in the Palace of the Congress: in the city of Guatemala, on the twenty-eighth day of the month of October of one thousand nine hundred forty-six, third year of the Revolution.

GERARDO GORDILLO BARRIOS

PRESIDENT.

R. ASTURIAS VALENZUELA, SECRETARY.

GREGORIO PREM,

SECRETARY.

National Palace: Guatemala, thirty of October of one thousand nine hundred forty-six.

Let it be published and complied with.

JUAN JOSE AREVALO.

THE MINISTER OF ECONOMY AND LABOR.

CLEMENTE MARROQUIN ROJAS.