The creation and collection by a local authority of a charge on liquid fuel-supply equipment (petrol pumps) located entirely on private property.
Creation of taxes
Principle of legality
RULING No. 581/12
5 of December of 2012
The legal duty to inspect that is specifically imposed on municipal councils with regard to petrol stations implies both adapting municipal organisational structures, departments and services where civil defence and environmental protection plans are concerned and carrying out inspection activities. The latter must be undertaken by the inspection units of the council in question, both when a licence or permit is granted and subsequently. Fuel supply facilities are a public risk factor; and a polluting factor that produces an enormous environmental burden. This in turn obliges municipalities to adapt their departments, services and organisational structures, both in environmental and urbanistic terms and in respect of their civil defence measures – measures that must include constant preventative monitoring work.
It is fair to presume that whoever operates petrol stations (or other facilities that supply liquid fuels) that are not situated on the regional and national road networks will give rise to or cause inspection work by the municipal councils that cover the council areas in which those stations are located, regardless of whether the stations are built entirely on private property or on land that forms part of the municipal public domain. The specific nature of the technical requirements this monitoring work is designed to control means that the responsibility for occasioning it lies entirely with the said facilities. The legal duty to inspect that is incumbent on municipal councils creates a sufficiently strong presumption that the mere location of such a station within a given council area is the cause of an activity whose purpose is to prevent risks from materialising. Municipalities cannot be required to provide the entities which are the object of that activity with evidence of each of the actions it comprises, in order to justify establishing a charge as compensation for the activity, which is itself undertaken pursuant to the law.
Local authority charges are levies that are based on the concrete provision of a local public service. Monitoring actions, which petrol stations require, can be deemed to be effectively caused, and also to be taken advantage of, by the owners of those facilities. Their payment of compensation is therefore justified.
The norm contained in the Municipality of Sintra Table of Charges and Other Revenues that allows the levying of a charge on liquid fuel pumps, when applicable to liquid fuel supply equipment that is entirely situated on private property, cannot therefore be criticised on constitutional grounds.
One of the constitutional norms governing the fiscal system is that taxes must be created by a law that determines each tax’s applicability and rate and the related tax benefits and guarantees available to taxpayers. It also says that the passage of such laws pertains exclusively to the Assembly of the Republic, unless the latter authorises the government to do so, which means that this is a matter which falls within the parliament’s partially exclusive legislative competence.
The present case involved a mandatory appeal that the Public Prosecutors’ Office was obliged to bring because a court had refused to apply certain norms on the grounds that they were unconstitutional.
At issue was a precept contained in the Municipality of Sintra Table of Charges and Other Revenues that served as the grounds for the levy of charges that were contested by an enterprise, which was the respondent in the present case. This precept established a charge owed by liquid-fuel supply stations situated entirely on private property. It was alleged that this circumstance of the stations’ location meant that the levies charged by the Municipality of Sintra were not justified by the provision of any corresponding service by the administrative entity concerned, and that it thus lacked the synallagmatic content that must govern the imposition and collection of any amount in the form of a municipal charge. The argument was that, because these levies are unilateral, their nature was that of true taxes, and that this would mean they were unconstitutional because their imposition violated the constitutional rules on the competence to create this type of cost.
The Constitutional Court took the view that an analysis of levies that only considers the tax/charge dichotomy is too simplistic. The Constitution enshrines other formats, which it generically calls “other financial contributions to public entities”. The latter are levies that are situated in an intermediate zone that ranges from charges to taxes, all of which are characterised by a para-commutative structure and are intended to provide compensation for the provision of services and/or items which the entities that pay them presumably cause or benefit from. The bilateral nature of charges continues to be one of their essential characteristics, but it is also necessary to bear in mind the existence of contributions whose format possesses para-commutative outlines and in which there is a more or less diffuse relationship based on an exchange between the administration and given groups of individuals.
The regime governing the Assembly of the Republic’s partially exclusive legislative competence differs with regard to these three categories of levy: taxes and their details are subject to the passage of a formal law (unless the Assembly authorises the government to create them); whereas in the case of charges and financial contributions, the Assembly’s exclusive competence only applies to the definition of the general regime, and this type of levy can be concretely created by governmental legislative acts without any need for parliamentary authorisation.
In the case before the Court, inasmuch as the levy which the Municipality of Sintra imposed on the respondent is based solely on a municipal regulation issued under the Law governing Local Authorities and the General Regime governing Local Authority Charges (RGTAL), and given that there is no other legal act which contains a generic empowerment of municipalities to create other types of levy, there are two possibilities: either the levy in question can be said to match the concept of charge set out in the RGTAL, and the aforesaid regulatory precept is thus not unconstitutional; or the levy corresponds to a tax or some other tax-like contribution with para-commutative outlines, and the precept must therefore inevitably be deemed unconstitutional.
The RGTAL defines local authority charges as levies that are based on the concrete provision of a local public service, the private use of property and/or items in the public and private domain pertaining to local authorities, or the removal of a legal obstacle to the behaviour of private individuals, which the law says is a local-authority attribute.
The protection of the environment is a legitimate extra-fiscal goal, and the Basic Law governing the Environment provides for the existence of an environmental and spatial planning instrument in the form of the setting of charges for the use of natural resources and environmental elements and for the disposal of effluents. However, it does not create such charges itself, nor does it empower municipalities to do so.
The RGTAL is the only legal act that empowers the Municipality of Sintra to create the levies set out in its Table of Charges and Other Revenues, inasmuch as it is the only one that permits fulfilment of the principle that charges must be created by a law.
It is only with knowledge of the reciprocal rights and duties of the municipal administration and the parties with an interest in the existence and operation of the abovementioned petrol stations that it is possible to assess whether the coactive pecuniary payment demanded by the Municipality of Sintra corresponds to any concrete counter-provision of services. The law charges municipal organs with the task of licensing and inspecting fuel storage and supply facilities, except those located on the regional and national road networks; and the mere functioning and operation of petrol stations entails risks to people’s health and safety and interferes with the quality of the environment. The reasons that led the legislator to establish a technical normative framework with a preventative nature and to create an inspection system designed to ensure that petrol stations comply with that framework also constitute a fulfilment of the duty to protect the environment. These stations represent a source of pollution, especially with regard to the environmental elements air, water, soil and subsoil around them. It is also the prohibition on pollution that justifies the normative conditions and the concrete terms under which the inspection work is conducted.
The Court said that it is necessary to bear in mind that municipalities play a central role in the operationalisation of the inspection system, because it is the environment of each municipality in which petrol stations are situated that is degraded, and because it is on them that the duty to protect the interests provided for in the specific legislation and regulations governing petrol station falls – a duty that goes beyond the general duties of administrative policing. As such, and considering the obligations to which the municipality is subject, the Court was of the view that the levy in question possesses a bilateral structure. For all these reasons it found that the norm before it was not unconstitutional
Ruling no. 177/10 (05-05-2010).
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