Exemption from concession charges: when is it possible? Two recent sentences

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Emma Potter

The construction contribution – provided for by the art. 16 of Presidential Decree n. 380 of 2001 and divided into the two items relating to infrastructure costs et al construction cost – burdensome on the person who undertakes a building initiative “represents one private participation in the public expenditure necessary for the implementation of urbanization works. In other words, since the law that introduced into the legal system the principle of onerousness of the title to build (art. 1 of law no. 10 of 1977), the reason for the sharing of public expenditure by the private individual is to be linked on an etiological level to surplus of urbanization works that the municipal administration is required to deal with in relation to the new building intervention of the applicant for the building permit”(1).

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Construction contribution: general principle

More specifically, the infrastructure costsof a largely corresponding nature, have the function of compensate the community for the new additional urban planning load that falls on the area due to the permitted building activitywhile the construction cost has been configured as one public servicedetermined taking into account the production of wealth generated by the exploitation of the territory, or as municipal participation in the increase in value of the builder's real estate property(2).

The construction contribution is a public law consideration, precisely because of the fundamental principle of the onerousness of the building permit implemented by the art. 16 of Presidential Decree n. 380 of 2001(3), and as such, although it is not bound by a rigid synallagmatic constraint with respect to the issuing of the building permit, it also falls, and coherently, within the category of imposed financial benefits referred to in the art. 23 of the Constitution(4).

The jurisprudence has stated that, “given the non-synallagmatic nature and the entirely publicistic regime that characterizes the contribution in question, its discipline it also binds the judgewho is prevented from independently configuring hypotheses of non-debtness of the specific financial benefit other than those authoritatively identified by the legislator”(5). This fully responds to the principle referred to in the aforementionedart. 23 of the Constitutionaccording to which “no pecuniary benefit can be imposed except by law”, which results in a rigidity of the legislative provisions that cannot be derogated from in the interpretation (6).

Therefore, due to the aforementioned hermeneutic coordinates no exemptions can be identified regarding the payment of the construction contribution other than those expressly provided for by law, as well reductions in its amount not clearly identified by the legislator cannot be envisagedand(7). Two recent rulings offer us the opportunity to investigate as many concrete cases brought to the attention of the judges.

Waste treatment and management plant

The first sentence we highlight is the n. 1087 of 15 April 2024 of the TAR Lombardia, Milan, sec. IV.
A company had obtained planning permission for the construction of a waste treatment and management plant and requested exemption from charges pursuant to art. 17, paragraph 3, letter. c), of the Consolidated Building Act (Presidential Decree no. 380/2001), according to which the construction contribution is not due “for systems, equipment, public works or works of general interest carried out by institutionally competent bodies as well as for urbanization works, also carried out by private individuals, in implementation of urban planning instruments”.

The Municipality denied the exemption, as the work was created and managed directly by a private individual and not on behalf of the PA and for mere profit purposes. The judges held inapplicable, in the specific case, the exemption invoked. In relation to the aforementioned rule, consolidated jurisprudence has emphasized the need to verify, in order to admit exemption from the payment of the contribution, the existence of both the objective and subjective requirement: the first occurs when public works or works of general interest are carried out, while the second occurs where a public body builds the work.

Nonetheless it is considered it possible to also recognize the exemption for works of general interest carried out by private individuals; however, this exemption applies only if the contractual instrument used formally allows the creation of the asset to be attributed directly to the entity on whose behalf the private individual has operated, or only if the private individual has acted as an indirect body of the Administration, as precisely in the concession or in the delegation(8).

In the case in question it was undisputed that the waste treatment plant had been built by a private individual for the exercise of his entrepreneurial activityThat only indirectly did it also fulfill a purpose of general interest; it was evident, therefore, that profit-making purpose pursued by the private individual prevented it from being considered as one longa manus of the public body, also given the absence of a legal bond capable of establishing the necessary link with the institutionally competent body (for example, the presence of a concession provision in the case of a private entity concessionaire of a public work), which demonstrated, therefore, the lack of the subjective requirement to benefit from the exemption from the payment of the construction contribution(9).

According to acceptable jurisprudence, art. 17, paragraph 3, letter. c, of Presidential Decree n. 380 of 2001 «in fact, it requires that these are works carried out “in implementation of urban planning instruments”, i.e. that there is a specific and timely provision of an urbanization work whose implementation is also permitted to private individuals. In other words, the essential distinction must be noted between the conformity of the work to the area's destination, and implementation of the destination, and therefore forecast, specific to the plan»(10).

Intervention on state property

The second sentence that we point out to readers is the n. 102 of 10 April 2024 of the TAR Abruzzo, Pescara, sec. THEin which the object of the dispute was a less frequent hypothesis in practice, namely the construction contribution in the case of interventions on state properties: specifically, the art. 17, paragraph 4, of the Consolidated Construction Law provides that “For interventions to be carried out on state-owned properties, as well as for extraordinary maintenance interventions referred to in article 6, paragraph 2, letter a) (now the correct reference is to art. 3, paragraph 1, letter b) and to art. 6-bis – ed.)if resulting in an increase in the urban planning load, the construction contribution is commensurate with the impact of urbanization works aloneprovided that this results in an increase in the walkable surface”.

The judges highlighted that the exclusion in question is justified when the works, being not marketableare not likely to show a significant increase in wealth from the point of view of taxation of this para-tax burden, as in the case of works owned by the State which, at the end of the duration of the concession, are intended to fall into the property of the granting Administration.

In the specific case brought to the attention of the judges, we were faced with a superficial ownership of a private individual in an area of ​​the State which did not prohibit the sale to third parties of the aforementioned real right: consequently, since the unmarketability was not discernible, the aforementioned paragraph 4 of the art. 17 does not apply and the interested party will have to pay the construction contribution in full and not limited to the portion relating to urbanization works.

Note

(1) Council of State, Ad. Plen., sentence. 7 December 2016, n. 24; also, Ad. Plen., sentence. 30 August 2018, n. 12; TAR Lombardy, Milan, section. II, sentence. 23 July 2020, n. 1418 and sent. 15 May 2020, n. 828.
(2) Former multis: Council of State, sec. II, sentence. 15 June 2021, n. 4633 and sent. 9 December 2019, n. 8377; section V, sent. 21 November 2018, n. 6592.
(3) See Constitutional Court, sentence. n. 64 of 10 April 2020.
(4) Council of State, Ad. Plen., sentence. 30 August 2018, n. 12; section IV, sentence. 7 November 2017, n. 5133; TAR Lombardy, Milan, section. IV, sentence. 22 January 2024, n. 160.
(5) TAR Veneto, section. II, sentence. 26 November 2019, n. 1281; TAR Marche, section. I, heard. 30 December 2017, n. 954.
(6) On the applicability of the principle to the matter of the construction contribution, cf. Council of State, sec. IV, sentence. 23 December 2019, n. 8703; TAR Lombardy, Milan, section. IV, sentence. November 28, 2022, n. 2644; section II, sentence. 15 May 2020, n. 828.
(7) On the need for a restrictive interpretation of the hypotheses of exemption from the contribution, cf. Council of State, sec. IV, sentence. 17 May 2023, n. 4907 and sent. 6 April 2023, n. 3556.
(8) Council of State, sec. IV, sentence. 17 May 2023, n. 4907 and sent. 6 April 2023, n. 3556.
(9) Council of State, sec. IV, sentence. 17 May 2023, n. 4907; sent. 17 October 2018, n. 5942; sent. 11 February 2016, n. 595; sent. 7 July 2014, n. 3421.
(10) Council of State, sec. IV, sentence. 17 October 2018, n. 5942; sent. 31 May 2023, n. 5375.

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