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  • Interpretation
  • No.765【Sharing Expenses of Installing New Water Pipelines within the Zone Expropriation Area】
  • Date
  • 2018/06/15
  • Issue
    • Does Article 52, Paragraph 1, Subparagraph 8 of the Enforcement Rules of the Land Expropriation Act, as promulgated by the Ministry of the Interior on April 17, 2002, violate the Gesetzesvorbehalt principle?
  • Holding
    •        Article 52, Paragraph 1, Subparagraph 8 of the Enforcement Rules of the Land Expropriation Act, as enacted and promulgated by the Ministry of the Interior on April 17, 2002, stipulates that “[t]he expenses for the necessary engineering … of pipelines or [electric and communication] cables within the zone expropriation area shall be shared by the land use applicant and the authority (organization) in charge of pipeline and cable businesses according to the following principles: … 8. The expenses of installing any new water pipelines shall be equally borne by the land use applicant and the authority (organization) in charge of the pipeline business.” This provision (as well as its amendment as promulgated on December 8, 2006, Article 52, Paragraph 1, Subparagraph 5 of the said Rule, stating that “5. the expenses of installing any new water pipelines shall be entirely borne by the land use applicant,” as far as it applies to the case where the land use applicant is a local self-governing body) lacks a specific statutory authorization and yet restricts the financial autonomy of the land use applicant and the constitutional right to property of the state-owned water supply enterprise that enjoys the status of a private juridical person. It, therefore, violates the Gesetzesvorbehalt principle and shall cease to apply no later than two years after this Interpretation is made public.
  • Reasoning
    •        The Taichung County Government (before its reorganization) commissioned the Teying Development Co., Ltd. (hereinafter the Teying Company) on February 27, 2001 to implement zone expropriation under the “Expansion of Ta-li (Tsao-ho area) Urban Plan” which had been approved by the Ministry of the Interior in October 2000. After making full payment to the Teying Company for the water pipeline engineering in the zone expropriation area in May 2003, the Taichung County Government requested the Petitioner, Taiwan Water Corporation (hereinafter the Petitioner), to repay half of the said payment (hereinafter the Disputed Pipeline Expense) with a written notice dated May 3, 2004. The Taichung County Government argued that the Petitioner, by virtue of its being an organization in charge of a water pipeline business, was obliged to bear the Disputed Pipeline Expense under Article 52, Paragraph 1, Subparagraph 8 of the Enforcement Rules of the Land Expropriation Act, promulgated by the Ministry of the Interior on April 17, 2002 (hereinafter the Provision at issue). The Petitioner, however, refused to repay. The Taichung County Government hence filed a civil complaint against the Petitioner in the Taiwan Taichung District Court, claiming the Disputed Pipeline Expense based on the Provision at issue. On December 25, 2010, the Taichung County and the Taichung City merged and reorganized to become the special municipality “Taichung City.” The Taichung City Government then filed a motion to assume the suit. Afterwards, the Taiwan Taichung District Court ruled against the Taichung City Government in Civil Judgment 99-Chung-Su-196 (2010). The Taichung City Government appealed to the court of the second instance, the Taiwan High Court Taichung Branch Court, which ordered the Petitioner to repay the Disputed Pipeline Expense in Civil Judgment 100-Chung-Shang-90 (2011). The Petitioner thus appealed to the court of the third instance. The Supreme Court denied the appeal for its lack of legal merit in Civil Judgment 102-Tai-Shang-1162 (2013) (hereinafter the Final Judgment), which finalized the case. However, the Petitioner insisted that the Provision at issue violates the Gesetzesvorbehalt principle because, being an administrative regulation, the Provision at issue nevertheless obliges the authority (organization) in charge of the pipeline business to bear half the expense for installing new necessary water pipelines, in absence of statutes or a specific authorization of a statute. In addition, in light of the beneficiary-pays principle, the Disputed Pipeline Expense ought to be borne by the land use applicant or the landowner. The petitioner, therefore, filed a petition to this Court, arguing that the Provision at issue contravenes Articles 15, 23, and 172 of the Constitution. 
      
    •        Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Interpretation Procedure Act (hereinafter the CIPA) provides that when an individual, a legal entity, or a political party, whose constitutional right was infringed upon and the remedies provided by the law for such infringement have been exhausted, has questions on the constitutionality of the statute or regulation relied thereupon by the court of last resort in its final judgment, a petition for an interpretation of the Constitution may be filed. From a legal perspective, a state-owned enterprise which is incorporated as a company following the Company Law is a private juridical person, even though the State owns more than fifty percent of its stock. It has independent legal personality and is a legal subject capable of enjoying rights and assuming obligations (see Article 6 of the Administrative Law of State-Owned Enterprise). It is noted that the Petitioner is a state-owned enterprise in the charge of the Ministry of Economic Affairs, incorporated as a company limited by shares regulated by the Company Law, and thereby enjoys the status of a private juridical person. Although the Petitioner’s legal rights and obligations are necessarily more constrained by public interest considerations, the Petitioner, within the scope of its founding purpose and Articles of Incorporation, is still protected by the constitutional right to property. After all, the State has chosen to establish such a state-owned enterprise in the form of a company out of considerations of market economy and efficiency, as well as further mandates the enterprise to operate in a manner befitting a business, increasing national income without incurring losses (see Article 4 of the Administrative Law of State-Owned Enterprise). Should the Petitioner’s constitutional rights be infringed, it may also file a petition to this Court under the aforementioned Article of the CIPA. Furthermore, it is noted that the Final Judgment relies upon the Provision at issue to rule against the Petitioner and the Petitioner has specifically indicated in its petition how the Provision at issue has contravened his right to property protected by the Constitution. The Petitioner’s petition shall be admissible since it complies with the aforementioned provision of the CIPA. This Court hereby delivers this Interpretation. The reasoning is as follows:
      
    •        People’s rights under the Constitution, unless falling into the scope of constitutional reservation (Verfassungsvorbehalt), may be limited by the law upon meeting the conditions stipulated in Article 23 of the Constitution. The determination of which freedom or right shall be regulated or restricted by statutes or by regulations authorized by a statute shall depend on regulatory density. Reasonable deviation is allowed considering the party to be regulated, the content of the regulation, and the limitations imposed on the interests or freedom. For instance, depriving people of their lives or limiting their physical freedom shall be in compliance with the principle of definitiveness of crime and punishment as well as stipulated by statutes. Similarly, limitations imposed upon people*s other freedoms shall also be stipulated by statutes. In the case where there is a statutory authorization for administrative institutions to make supplemental regulations, the authorization shall be specific and precise. The competent authority may promulgate only those limitations concerning details and technical matters of law enforcement (see J.Y. Interpretation No. 443). Although the state-owned enterprise with the status of a private juridical person can be more constrained because of its public interest purposes and is subject to the instruction and supervision of the State, it is nevertheless protected by the constitutional right to property, given its status of an independent private juridical person. The limitations imposed on its right to property by the State, therefore, shall be stipulated by statutes, or by regulations specifically authorized by a statute.
      
    •        Moreover, although central and local governments are both parts of the organizational structure of the State, local self-governing bodies still enjoy the status of an independent public juridical person. They are protected by the Constitution and are vested with financial autonomy. The central government thus shall only require local governments to share expenses insofar as such a requirement does not encroach upon the core of their financial autonomy and is imposed by statutes, or by regulations specifically authorized by a statute.
      
    •        The Provision at issue provides that “[t]he expenses for the necessary engineering … of pipelines or [electric and communication] cables within the zone expropriation area shall be shared by the land use applicant and the authority (organization) in charge of pipeline and cable businesses according to the following principles: … 8. The expenses of installing any new water pipelines shall be equally borne by the land use applicant and the authority (organization) in charge of the pipeline business.” (It was amended to be Article 52, Paragraph 1, Subparagraph 5 of the same Rule (hereinafter the Current Provision), as promulgated on December 8, 2006, which states that “5. The expenses of installing any new water pipelines shall be entirely borne by the land use applicant.”) In the case where the land use applicant is a local self-governing body, this Provision affects the financial autonomy of the land use applicant. Meanwhile, in the case where the authority (organization) in charge of pipeline businesses is a public-owned water-supply enterprise with the status of a private juridical person, this Provision also affects the constitutional right to property of the authority (organization). Furthermore, the obligation of the land use applicant and the authority (organization) in charge of pipeline businesses to share the expenses of installing pipelines under the Provision at issue, or the obligation of the land use applicant to bear the expenses exclusively under the Current Provision, involves the benefits of developing the zone expropriation area, the financial plan of the land use applicant, the financial affordability of the authority (organization) in charge of pipeline businesses etc. The Provisions are neither those about details nor technical matters of law enforcement. Nor do they merely have minor consequences. As such, they shall have a statutory basis or specific statutory authorization, to comply with the Gesetzesvorbehalt principle. 
      
    •        If the legislative body should authorize the administrative agency to promulgate supplemental regulations, the contents, objectives, and scope of such authorization must be specific and unambiguous, and the contents of the regulations must also comply with the meanings and objectives of the authorization. The specificity of the authorization shall not be confined to the language of statutory provisions but shall be determined by the totality of statutory interpretation or by the relevant meaning of the statute as a whole. The requirement of specific statutory authorization is only met when the intent of the legislator to authorize the competent authority to promulgate supplemental regulations can be thereby determined. It is noted that both the Provision at issue and the Current Provision were made under the authorization of Article 62 of the Land Expropriation Act, which provides that “[t]he enforcement rules of this Act shall be stipulated by the Central Competent Authority.” However, this Article does not grant a specific authorization as to among whom and by what percentage the expenses of installing necessary water pipelines within the zone expropriation area shall be shared. Moreover, it cannot be ascertained by the totality of interpretation of the Land Expropriation Act that the legislator intends to authorize the competent authority to make supplement regulations concerning “the parties to share the engineering expenses of installing new necessary water pipelines within the zone expropriation area and the respective proportion of expenses borne by each.” As a result, the Land Expropriation Act does not suffice to be the authorization basis for the Provision at issue Disputed and the Current Provision.
      
    •        Moreover, a regulation lacking a specific statutory authorization can nevertheless be consistent with the Gesetzesvorbehalt principle, provided that it only reiterates what has been stated elsewhere in statutes. It is noted that Article 65 of the Water Supply Act also involves sharing expenses of pipelines between individual users and water supply enterprises. It states: “A water supply enterprise may charge individual users subsidy fees up to one half of the cost incurred from adding or installing new pipes for those users residing in areas without pipelines.” However, in comparison, regarding the parties obliged to share the expenses, Article 65 of the Water Supply Act prescribes that individual users may be requested to subsidize the expenses, whereas the Provision at issue explicitly requires land use applicants, rather than individual users, to share half of the expenses. As far as the proportion of the expenses shared is concerned, Article 65 of the Water Supply Act states that the amount up to half of the total expenses is collectible. It is, however, subject to the discretion of the water supply enterprise as to whether to collect such fees or not. The Provision at issue, on the other hand, obligates the land use applicant to share half of the expenses, regardless of whether the water supply enterprise indeed brings a claim against the land use applicant for the fee. In terms of the area where the pipelines whose expenses are to be shared locate, Article 65 of the Water Supply Act covers only areas without water pipelines, while the Provision at issue regulates the zone expropriation area. In respect of the objectives of regulation, Article 65 of the Water Supply Act seeks to balance the legal obligation of water supply enterprises to supply water and individual users’ need to access the water supply. It aims to moderately ease the financial burden of water supply enterprises. Installing new water pipelines in the zone expropriation area, on the other hand, is designed by the land use applicant based on the overall considerations of the self-liquidating zone expropriation plan, rather than individual users’ need to access the water supply. In this regard, the land use applicant’s obligation to share the expenses under the Provision at issue is also meant to reasonably distribute costs and benefits of land development, which is different from the objectives of Article 65 of the Water Supply Act. That is, suffice it to say that the Provision at issue and Article 65 of the Water Supply Act differ in the parties whom are obligated to share the expense, the percentage by which the expense is split, the area in which the pipelines are located and the objectives of the regulations. In addition, the Current Provision is even more different from Article 65 of the Water Supply Act, although it does not require the water supply enterprise to bear partial expenses but obligates the land use applicant to bear the full amount.
      
    •        In conclusion, the Provision at issue lacks a specific statutory authorization and yet it restricts the financial autonomy of the land use applicant and the constitutional right to property of the state-owned water supply enterprise with the status of a private juridical person. (The Current Provision, similarly, restricts the financial autonomy of the local self-governing body in absence of a specific statutory authorization, as far as it applies to the case where the land use applicant is a local self-governing body.) Further, the contents of the Provision at issue are dissimilar from Article 65 of the Water Supply Act. The Provision at issue, therefore, violates the Gesetzesvorbehalt principle and shall cease to apply no later than two years after this Interpretation is made public.
      
    •        In addition to water pipelines, the engineering costs of other necessary cables (such as electric power and communication) within the zone expropriation area similarly have a bearing on the financial autonomy of the land use applicant that is a local self-governing body and the property interest of the authority (organization) in charge of pipeline businesses. It is hereby pointed out by this Court that the relevant competent authority shall complete a thorough review and proceed to revise, if necessary, on such expense sharing schemes.
      
    • *Translated by Ya-Wen YANG
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