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Reduction of the compensatory amount for companies providing passenger transport services to the public pursuant to § 45a.2 sentence 3 of the Passenger Transport Act unconstitutional due to defects in the legislative process
Press Release No. 2/2010 of 20 January 2010
Order of 8 December 2009
2 BvR 758/07
As a rule, public transport companies carry trainees at a reduced price even though the latter have no legal entitlement to such treatment. According to the case law of the Federal Administrative Court (Bundesverwaltungsgericht), companies are, however, required in the public interest to stagger fares to allow, within the confines of their economic situation, for ordinary, social and reduced fares. Consequently, companies have the power to set their fares in such a way that they are able to compensate for shortfalls in revenues from individual services such as the transportation of school pupils by increasing the fares for other services thereby pursuing a business policy that covers costs and generates profits. Furthermore, since 1977 the state has, in addition, granted companies under certain legally defined conditions a compensatory payment according to § 45a.2 sentence 1 of the Passenger Transport Act (Personenbeförderungsgesetz - PBefG) for transporting trainees. § 45a.2 sentence 3 PBefG, which was inserted in the Passenger Transport Act by Article 24 of the 2004 Budget Support Act (Haushaltsbegleitgesetz), reduced the compensatory amount for 2004 by 4% and provided for further reductions in the following years.
The 2004 Budget Support Act is based on a draft bill of the Federal Government, which was intended to implement in particular significant aspects of the Federal Government's 2003 budget stabilisation concept, including, among other things, a reduction in subsidies. The Bundesrat rejected the bill at its first reading. At the same time, a working group led by the Minister-Presidents of the Länder (states) Hesse and North Rhine-Westphalia, Roland Koch and Peer Steinbrück, prepared what became known as the Koch/Steinbrück Paper; it provided for a comprehensive reduction in subsidies and was published on 30 September 2003. During the first reading of the 2004 Budget Support Act in the German Bundestag on 9 September 2003, there were unspecific references to the suggestions in the Koch/Steinbrück Paper, but the Passenger Transport Act itself was not mentioned. The bill was referred to the Budget Committee as the responsible committee and to the German Bundestag's Finance Committee for an opinion.
The Finance Minister of the Land North Rhine-Westphalia, Dieckmann, and the Minister for European and Federal Affairs of the Land Hesse, Riebel, presented in part the proposals for reductions in subsidies of the Koch/Steinbrück working group at meetings of the Budget Committee and Finance Committee on 15 October 2003; they requested that such proposals be incorporated in the deliberations on the draft bill. Both committees were in favour of approving the draft bill in amended form, however, without consideration of the Koch/Steinbrück Paper.
During the German Bundestag's second and third readings of the 2004 Budget Support Act on 17 October 2003, the proposals of the Minister-Presidents of Hesse and North Rhine-Westphalia were mentioned, but the Paper's specific points were not explored in detail. The draft bill was adopted in the committee version at the second reading and at the final vote.
When the draft bill was presented to the Bundesrat for its second reading, it requested that the Mediation Committee be convened with the aim, among others, of incorporating the proposals made by the Minister-Presidents, Koch and Steinbrück, in the draft bill. The Mediation Committee agreed on a proposal to amend the Passenger Transport Act on 16 December 2003; the committee recommendation for decision was adopted by the German Bundestag at its sitting on 19 December 2003. A majority of the Bundesrat consented to the Act on 29 December 2003. The Act was published in the Federal Law Gazette on 31 December 2003 and entered into force on 1 January 2004.
The complainant provides bus passenger transport services to the public, including trainees who were transported for a reduced fare. It applied to the competent authority in April 2005 for compensation for its public services in road passenger transport for the 2004 calendar year; the compensation was not granted in the amount applied for. The complainant brought an action against the reduction before the Administrative Court, claiming that the 2004 Budget Support Act and thus the provision for a reduction in § 45a.2 sentence 3 PBefG had not been properly enacted. It stated that it had been the Mediation Committee that had first introduced the provision into the legislative process and that it had done so without the provision receiving the prior consent of the German Bundestag and the Bundesrat. The statement of claim and the motion for leave to appeal were unsuccessful. The complainant alleges a violation of its fundamental rights under Article 19.4, Article 12.1 and Article 14.1 of the Basic Law (Grundgesetz - GG) as well as under Article 20.3 in conjunction with Article 76.1, Article 77.1, Article 77.2 and Article 77.2a GG.
The Second Senate of the Federal Constitutional Court decided that the reduction of the compensatory amount pursuant to variant 1 of § 45a.2 sentence 3 PBefG was unconstitutional, but not null and void. The Act will remain applicable until 30 June 2011 at the latest. The Basic Law places limits on the powers of the Mediation Committee (Article 20.2, Article 38.1 sentence 2, Article 42.1 sentence 1 and Article 76.1 GG); these powers were exceeded in the current legislative process. The Mediation Committee introduced its own proposals into the legislative process without the German Bundestag's participation in the constitutional manner. As a result, the complainant's fundamental right under Article 2.1 GG in conjunction with Article 19.3 GG is violated. Furthermore, the challenged decision of the Higher Administrative Court (Oberverwaltungsgericht) violates the complainant's fundamental right under Article 19.4 GG because the Court extended the requirements regarding the substantiation of a motion for leave to appeal in an unreasonable manner.
In essence, the decision is based on the following considerations:
The powers of the Mediation Committee and its role and function in the legislative process have been clarified sufficiently in the case-law of the Federal Constitutional Court. The Mediation Committee has no right to initiate laws; its task is solely to prepare proposals for amendments on the basis of the law adopted and the previous legislative procedure, which, based on the request for the Mediation Committee to be convened, are within the scope of the parliamentary goals of the legislative proposals and which settle political differences between the German Bundestag and the Bundesrat that have at any rate begun to show. The distribution of powers among the legislative bodies is such that the German Bundestag has been given the crucial role in the legislative process. The compromise proposal must be attributable to the German Bundestag due to the parliamentary debate conducted there. The motions and comments of the members of parliament, the Bundesrat and, possibly, the Federal Government that are introduced into the process will determine the legislative process leading to the request to convene the Mediation Committee. The prerequisites that must be satisfied before the Mediation Committee may take up the matter to be regulated are that the motions and comments were disclosed during the legislative process and that the members of parliament had the opportunity to discuss them. In this context, the Mediation Committee must respect the connection also made necessary by the Basic Law between public debate in parliament and subsequent mediation between the constitutional bodies involved in the legislation.
The amendment to the Passenger Transport Act by the 2004 Budget Support Act was not formally enacted in conformity with the Basic Law. The introduction of the Koch/Steinbrück Paper into the German Bundestag's parliamentary proceedings and its treatment in the Bundestag's committees and plenary session did not bestow on the Mediation Committee the power to include an amendment of the Passenger Transport Act in its compromise proposal. At least in relation to the reduction of financial aid, the proposals contained in the Koch/Steinbrück Paper were not suitable in terms of their scope and structure for proper parliamentary debate and were also not designed for such in light of how they were introduced and treated. Instead the whole conduct of proceedings was obviously aimed towards first achieving the political compromise, which had from the start been recognised as a necessity, in the Mediation Committee, while avoiding the publicity of a parliamentary debate and without providing the members of the German Bundestag with sufficient information.
The proposals for reducing financial aid from the Federal Government contained in the Koch/Steinbrück Paper and their treatment in the committees and in the plenary session of the German Bundestag did not satisfy the requirements placed on motions and comments in the legislative process, which determine the framework and subject matter of the mediation procedure. The scope of the subject matter of the provision inserted in the draft bill by the Mediation Committee was not recognisable in the legislative process prior to the adoption of the law. This is because the listing in the Koch/Steinbrück Paper of various financial aid which should be subject to across-the-board reductions, without any attempt to evaluate them legally and politically and without allocating them to the relevant areas (budget or legislation), made it practically impossible for the members of parliament to deal with the proposals in detail in a responsible manner.
The failure to concretise the issues was also not rectified by the fact that the Koch/Steinbrück Paper was dealt with by the committees of the German Bundestag and that there was a recommendation for a decision and a report from the Budget Committee since the Ministers limited themselves to mentioning examples when presenting the Paper.
Similarly, the various mentions of the Koch/Steinbrück Paper in the three readings of the 2004 Budget Support Act in the plenary session of the German Bundestag did not mean that it would have been permissible for the Mediation Committee to include the Paper's list of financial aid. The constitutionally guaranteed rights of members of parliament to receive information and participate in the legislative process must be respected in the ways provided for by the Basic Law and the Rules of Procedure of the German Bundestag. The purpose of the principle of parliamentary openness is to make the content of parliamentary debates public.
Furthermore, the way that the Koch/Steinbrück Paper was introduced into the parliamentary process does not meet the requirements placed on the formalities of the legislative process; this is because the Koch/Steinbrück Paper was not introduced into the legislative process at the initiative of the Bundesrat (Article 76.1 GG). The appearances of the Land Ministers, Dieckmann and Riebel, before the German Bundestag's committees were based on their right to speak under Article 43.2 sentence 2 GG. The right to speak is not a power available to the Bundesrat in its capacity as a constitutional body as a whole, but rather as an individual right of individual members of the Bundesrat. Consequently, the Ministers did not introduce the Paper in the form of comments by the Bundesrat on the Federal Government's draft bill; instead the Paper was material which was presented to the committees and members of the German Bundestag in a non-obligatory manner.
The inclusion of the content of the Koch/Steinbrück Paper in the Mediation Committee's recommendation for a decision can also not be justified by the fact that, when making its request that the Mediation Committee be convened, the Bundesrat demanded that the Act be thoroughly revised and that the proposals of the Minister Presidents, Roland Koch and Peer Steinbrück, for reducing tax benefits and financial aid be included. The request for the convening of the Mediation Committee would then be tantamount to a legislative proposal, which is something that may only be made in the manner provided for in the Basic Law. This would allow the German Bundestag a right of veto which is exactly that which makes the position of the Bundesrat in the legislative process so special.
The defect in the legislative process affects the validity of the challenged law since it is obvious. On a sound appraisal of the situation, it was evident in 2003 to the bodies involved in the passage of the legislation that the procedure for amending the Passenger Transport Act through the 2004 Budget Support Act was not compatible with the Basic Law. The judgment of the Senate of 7 December 1999 had already clarified the constitutional standards (see on this also BVerfGE 120, 56, 79-80). The fact that it was likely at the time that the political compromise needed could only be reached through the Mediation Committee does not justify shortening the process in the German Bundestag so as to accelerate access to the mediation procedure if for no other reason than that this would considerably restrict parliamentary openness and thus the transparency of political responsibility vis-à-vis the citizenry.
No other violations of the Basic Law exist. The first variant of § 45a.2 sentence 3 PBefG is constitutional as far as its substance is concerned. The activities of the complainant as a transport company providing passenger transport services to the public fall within the fundamental right to freedom of occupation under Article 12 GG in conjunction with Article 19.3 GG. Whether the provision also tends towards a regulation of occupational freedom does not have to be answered here since it serves recognised considerations of public interest and does not burden the persons affected disproportionately. Recognition of the considerations of public interest when fixing fares for passenger transport services requires that school pupils and trainees as a group receive preferential treatment. However, increases in the level of fares for other groups reaches its limit in the interests of public transport, particularly in the market's ability to absorb such increases in fare prices. The purpose of the compensation under § 45a PBefG is to close such gaps and to ensure that public passenger transport services can survive. The consolidation of public budgets - in this case, the budgets of the Länder, which are obliged to grant compensation under § 45a.3 sentence 1 PBefG - is a legitimate objective of the legislature. There is no evidence to suggest that an average transport company could not have compensated for the 4% reduction in the compensatory amount after a reasonable period of time by setting its prices in a manner which could be expected of it. Nor was the legislature obliged to limit the scope of application of the provision to newly granted concessions or to postpone the Act's entering into force. A mere expectation on the part of a transport company that the law will continue to apply in its current form without amendment is not protected by the Basic Law. For the same reasons, the challenged provision does not violate Article 14.1 GG.
The incompatibility of the challenged provision in variant 1 of § 45a.2 sentence 3 PBefG with the Basic Law does not lead to its being null and void because if this were the case the legislative concept of the 2004 Budget Support Act would be retrospectively invalidated. As a result, in order to have due regard to the interests of reliable financial and budgetary planning and a uniform exercise of administrative powers during periods of time that are in largest part past, the provision will remain provisionally enforceable. Its continued applicability will terminate, however, when a new provision is enacted or on 30 June 2011 at the latest.
The order of the Higher Administrative Court which refused the complainant's motion for leave to appeal violates the complainant's fundamental right under Article 19.4 GG; this is because the Higher Administrative Court extended the requirements regarding the substantiation of a motion for leave to appeal in § 124a.4 sentence 4 of the Code of Administrative Court Procedure (Verwaltungsgerichtsordnung - VwGO) in a manner that cannot be objectively justified. In addition, in view of the formal unconstitutionality of the indirectly challenged Act it failed to recognise the existence of a ground for leave to appeal which took the form of a serious doubt as to the correctness of the Administrative Court's decision pursuant to § 124.2 no. 1 VwGO; this failure occurred in a manner that violates Article 19.4 GG
The vote on the decision was seven in favour and one against.