On March 22, 2010, by means of ruling No. 119/2010 (the “Ruling”), the Constitutional Court found section 2, paragraphs 1, 2 and 3 and section 3, paragraphs 1 and 2 of the Regional Law No. 31/2008 of the Apulia region, unconstitutional for breach of the general principles governing allocation of legislative powers between the State and Regions on energy matters.
In particular, the Court repealed the regional law provisions which, by derogation to Art. 12 of Legislative Decree No. 387/2003, subjected photovoltaic plants having a capacity up to 1MW to a simplified authorization procedure (consisting of a mere declaration of commencement of works, so called DIA) as opposed to the more complex and comprehensive single authorisation procedure set forth by national legislation.
In the aftermaths of the Ruling, the Italian parliament is discussing an amendment to national legislation, which, if approved, would introduce at national level the very provision contained in the Apulia legislation and repealed by the Court.
Impact of the Ruling on Pending Projects Authorised Under the Repealed Provisions of Regional Law 31/2008
From the date of publication of the Ruling, both public administrations and courts, are bound not to apply the provisions which were declared unconstitutional. However, it should be noted that the Ruling does not per se entail the automatic annulment of the DIAs submitted under Regional Law No. 31/2008. As a matter of general principles, DIAs (as administrative acts1) issued (or approved) pursuant to a law which is subsequently declared unconstitutional, remain valid until formally (i) annulled/revoked by the competent authorities2 or (ii) annulled by an Administrative Court upon challenge lodged by interested third parties.
Self-defence by the Public Administrations
Public administrations may revoke or annul an administrative act to protect the public interest, without fixed time limits, provided that (i) the public interest prevails over private interests (and in the matter at issue, private interests become stronger and stronger as the construction of the plant progresses to completion) and (ii) the action is taken within a reasonable timeframe.
Third Parties Challenges
As in the case of self-defence by the Public Administration, here again the Ruling would not, per se, provide sufficient grounds for a third party challenge to a DIA approved under Regional Law No. 31/20083. In addition a claimant would have to provide evidence that (a) the DIA prejudices a specific interest of his protected by the law; (b) there is an actual and direct advantage for the claimant arising from the annulment of the administrative act.
The challenge must be filed within 60 days (if the challenge is filed with an Administrative Court) or 120 days (if the challenge is lodged with the President of the Republic) from the date the claimant acquires full knowledge of the administrative act.
Prevailing case law holds that such knowledge is deemed to be acquired when the authorised project reveals its essential features (and possibly those which are in breach of the existing permits) in a clear and unambiguous way4.
Such moment in time tends to coincide, absent any solid proof to the contrary to be considered on a case-by-case basis, with the date of completion of the relevant project.
Retrospective Impact of the Ruling
According to prevailing case law, Constitutional Court’s rulings do not impact those matters that may be deemed as no longer “pending”, i.e. situations that have been ultimately and finally defined (e.g. by operation of statute of limitations or res iudicata) and, with respect to administrative acts (to which a DIA may be likened to some extent, see footnote 1), those that are not capable of being challenged before an administrative court for the lapse of the statutory terms (i.e. the above mentioned 120-day period).
Frame Law Bill Implementing EU Legislation 2009
An amendment to the draft frame law bill setting forth principles for the implementation, amongst others, of Directive 2009/28/CE, was approved on May 125 by the Italian parliament, which extends the applicability of DIA from the current threshold of 20 KW to the 1 MW threshold, which was provided for by the recently repealed Apulia legislation.
While in the absence of an explicit retrospective effect, the passing of such frame law and of the relevant implementing legislative decree would not per se impede the possible revocation/challenge of the DIAs already awarded under the repealed Regional Law, it would certainly make the public interest leg of a revocation initiative or challenge claim much weaker.
In any event, a cautious approach for sponsors interested in buying projects affected by the Ruling would be to i) postpone investment until the expiry of a 120-days period after the filing of the relevant work-completion notice and ii) make such investment conditional upon no action in self-defence having been taken or third-party challenge having been brought against the relevant DIA in the interim.
Should any such action or challenge have been taken or brought, the impact of the above frame law, if enacted, will have to be carefully assessed on a case-by-case basis6.