JUDGMENT NO. 120

YEAR 2024

ITALIAN REPUBLIC

IN THE NAME OF THE ITALIAN PEOPLE

THE CONSTITUTIONAL COURT

composed of: President:

Augusto Antonio BARBERA;

Justices: Franco MODUGNO, Giulio PROSPERETTI, Francesco VIGANÒ, Luca ANTONINI, Stefano PETITTI, Angelo BUSCEMA, Emanuela NAVARRETTA, Maria Rosaria SAN GIORGIO, Filippo PATRONI GRIFFI, Marco D’ALBERTI, Giovanni PITRUZZELLA, Antonella SCIARRONE ALIBRANDI,

has delivered the following

JUDGMENT

in the proceedings concerning the constitutional legitimacy of Article 7 of Legislative Decree No. 158 of December 27, 2019 (Implementation rules of the special statute of the Sicilian Region regarding the harmonization of accounting systems, judicial accounts and controls), as amended by Article 1, paragraph 1, of Legislative Decree No. 8 of January 18, 2021 (Amendments to Article 7 of Legislative Decree No. 158 of December 27, 2019, containing implementation rules of the Statute of the Sicilian Region regarding the harmonization of accounting systems, judicial accounts and controls), and of Article 5 of Law of the Sicilian Region No. 30 of November 26, 2021 (Adjustment of the budget for the financial year 2021 and for the three-year period 2021/2023), initiated by the Court of Accounts, Joint Sections for the Sicilian Region, in the equalization proceedings of the general accounts of the Sicilian Region, for the financial year 2021, by order of January 15, 2024, registered under No. 15 of the register of orders 2024 and published in the Official Gazette of the Republic No. 8, first special series, of the year 2024.

Having seen the act of constitution of the Sicilian Region;

Having heard at the public hearing of May 21, 2024, the Reporting Justice Angelo Buscema;

Having heard the lawyers Alessandro Dagnino and Nicola Dumas for the Sicilian Region;

Deliberated in the council chamber of May 21, 2024.

Held in Fact

1.– The Court of Accounts, Joint Sections for the Sicilian Region, by order of January 15, 2024, registered under No. 15 of the register of orders 2024, issued during the proceedings for the equalization of the general accounts of the Sicilian Region for the financial year 2021, raised questions of constitutional legitimacy of Article 7 of Legislative Decree No. 158 of December 27, 2019 (Implementation rules of the special statute of the Sicilian Region regarding the harmonization of accounting systems, judicial accounts and controls), in the version resulting from the amendments made by Article 1, paragraph 1, of Legislative Decree No. 8 of January 18, 2021 (Amendments to Article 7 of Legislative Decree No. 158 of December 27, 2019, containing implementation rules of the Statute of the Sicilian Region regarding the harmonization of accounting systems, judicial accounts and controls), applied ratione temporis; and of Article 5 of the Law of the Sicilian Region No. 30 of November 26, 2021 (Adjustment of the budget for the financial year 2021 and for the three-year period 2021/2023), with reference to Articles 81, 97, first paragraph, and 117, second paragraph, letter e), of the Constitution, «in conjunction» with Articles 3, 5 and 120, second paragraph, of the Constitution.

1.1.– The referring court reports that at the public hearing of November 25, 2023, of the equalization proceedings of the accounts for the financial year 2021, the operative part was read whereby, on the one hand, specific irregularities of the budget account and of the statement relating to the administration result were ascertained, as well as of the statement of financial position and the income statement; on the other hand, for the aspects concerning the exact quantification of the final appropriations to be entered in the budget account for the financial year 2021 in relation to the financial deficit, the judgment was suspended in order to raise the aforementioned questions of constitutional legitimacy, pursuant to Article 23 of Law No. 87 of March 11, 1953 (Rules on the establishment and operation of the Constitutional Court).

More precisely, the referring court reports that the budget account for the financial year 2021, which is the subject of the equalization proceedings, in application of the provisions contained in Article 7 of Legislative Decree No. 158 of 2019 in force ratione temporis, i.e. in the version amended by Article 1, paragraph 1, of Legislative Decree No. 8 of 2021, the results of which would then have also merged into Article 5 of the Sicilian Regional Law No. 30 of 2021, containing the budget adjustment for the financial year 2021, recorded final appropriations for the financial deficit totaling EUR 100,000,000, of which EUR 47,341,217.87 on Chapter 1 (Presumed financial deficit relating to the ordinary funds of the Region) and EUR 52,658,782.13 on Chapter 16 (Financial deficit for the year 2019 relating to the ordinary funds of the Region), in relation to the ordinary deficit of the management of the financial year 2019.

As for the deficit relating to previous years – specifically: for the year 2014, to be absorbed in twenty financial years starting from 2015; for the year 2015 as a result of the extraordinary reassessment of the residuals, to be absorbed in thirty financial years starting from 2015; for the year 2017 to be absorbed pursuant to Article 1, paragraph 874, of Law No. 145 of December 30, 2018 (State budget for the financial year 2019 and multi-year budget for the three-year period 2019-2021); for the year 2018 to be absorbed in ten financial years starting from 2019 – the appropriations recorded in the financial year 2021 are equal to zero, as a result of the challenged provisions.

The aforementioned Article 7 of Legislative Decree No. 158 of 2019, in force ratione temporis, provides, in fact, that «1. In the first application of these implementation rules, without prejudice to the exclusive state competence in the field of harmonization of budgets, the deficit and the unrecovered deficit quotas, relating to the financial statements for 2018, shall be repaid in ten financial years. In any case, the application of this paragraph may not affect the management of payments. In order to address the negative effects deriving from the Covid-19 epidemic, the coverage quotas of the deficit ascertained with the approval of the 2018 financial statements, to be repaid in the financial year 2021, are deferred, exclusively for that year, to the year following that of the conclusion of the originally planned repayment. 2. Also in order to take into account the provisions of Article 9 of Law No. 243 of 2012, the ten-year term referred to in paragraph 1 is reduced to three years as provided, with respect to the repayment times indicated in paragraph 1 with reference to the state of emergency of the COVID-19 epidemic, if, by January 31, 2021, the Region and the State do not sign an agreement containing specific deficit repayment commitments. These commitments, in implementation of the principles of balance and sound financial management of the budget, of responsibility in the exercise of the electoral mandate and of intergenerational responsibility, pursuant to Articles 81 and 97 of the Constitution, must guarantee compliance with specific parameters of virtue, such as the structural reduction of current expenditure, with effects starting from the financial year 2021. The Region also undertakes to agree with the State on specific reform interventions for the purposes referred to in this paragraph».

According to the referring judge, this regulatory framework would imply a derogation from the general principles referred to in Article 42, paragraph 12, of Legislative Decree No. 118 of June 23, 2011 (Provisions on the harmonization of accounting systems and budget schemes of the Regions, local authorities and their bodies, pursuant to Articles 1 and 2 of Law No. 42 of May 5, 2009) and Annex 4/2, paragraphs 9.2.20 to 9.2.30, provided by the state legislator in the exercise of exclusive legislative competence in the field of harmonization of public budgets, pursuant to Article 117, second paragraph, letter e), of the Constitution.

Indeed, the judge a quo represents that for the Sicilian Region, in application of the aforementioned statutory implementation rules, there would have been a lightening of the obligations to recover the deficit (and a consequent expansion of spending capacity) calculated, by the Sicilian joint sections referring, at EUR 2,256,794,220.07.

The same judge a quo acknowledges that the Sicilian Region has appealed, pursuant to Articles 11, paragraph 6, letter e), and 123 of Annex 1 to Legislative Decree No. 174 of August 26, 2016 (Code of Accounting Justice, adopted pursuant to Article 20 of Law No. 124 of August 7, 2015), with an appeal notified on December 27, 2023, before the Court of Accounts, joint sections in judicial composition (hereinafter: joint sections in judicial composition), against the «operative part prot. n. 255 of 25.11.2023, of the decision on the General Accounts of the Sicilian Region for the financial year 2021, adopted by the Court of Accounts, Joint Sections for the Sicilian Region, in the council chamber of 25.11.2023, read at the public hearing of the same 25.11.2023» as well as, with reservation of integration of the grounds, the decision and the attached report, at that moment not known as they had not yet been filed.

1.2.– As to the legitimacy of the Joint Sections for the Sicilian Region to raise questions of constitutional legitimacy during the proceedings for the equalization of the accounts, the now constant constitutional jurisprudence is cited.

1.3.– On the point of relevance, the referring judge argues that the challenged provisions, since they contain a specific and exceptional regulation on the recovery of the deficit for the Sicilian Region for the year 2021 – different from the ordinary one, provided by Article 42, paragraph 12, of Legislative Decree No. 118 of 2011, and for this allegedly in conflict with the current constitutional framework – would represent the reference coordinates for the quantification of expenditure appropriations in the budget account for the financial year 2021 and of the consequent annual interim repayment objectives subject to planning and reporting. If the provisions suspected of unconstitutionality were to be removed from the legal system, the deficit item entered in the expenditure part of the budget for the financial year 2020 would appear illegitimate as seriously underestimated, with a potential overturning of the entire planning and related reporting. These provisions are relevant «from the point of view of the argumentative path suitable to support the decision of the main proceedings in terms of equalization/non-equalization of the expenditure items pertinent to the final deficit appropriations and of all the individual partitions of the final document under examination on which the consequent effects fall» (the judgments of this Court No. 184 of 2022, No. 235 of 2021 and No. 49 of 2018 are cited).

Neither the pendency of the question of constitutional legitimacy raised by order registered under No. 40 of the register of orders 2023, concerning provisions with a different prescriptive content (i.e., Article 7 of Legislative Decree No. 158 of 2019, in its original wording, and Article 4, paragraph 2, of the Law of the Sicilian Region No. 30 of December 28, 2019, containing «Adjustment of the budget for the financial year 2019 and for the three-year period 2019/2021»), nor the legislation that came into force after the closure of the financial year 2021, would affect the relevance of the questions.

On the latter point, the referring judge points out that, following the filing of the operative part with which the Joint Sections suspended the proceedings for the equalization of the accounts for the financial year 2020, at the end of the public hearing of December 3, 2022, the legislation on the deficit of the Sicilian Region was amended by the state legislator during 2023 with two legislative interventions.

Article 1, paragraphs 841 to 845, of Law No. 197 of December 29, 2022 (State budget for the financial year 2023 and multi-year budget for the three-year period 2023-2025), in force since January 1, 2023, established a new ten-year repayment path, at constant installments, of the «deficit relating to the financial year 2018 and [of] the related deficit quotas not recovered as of December 31, 2022» starting from the financial year 2023 and on the basis of the commitments already defined with the State in the agreement signed on January 14, 2021.

For this reason, with resolution No. 67 of February 10, 2023, the Sicilian Regional Council would have approved the «Deficit Repayment Plan presumed as of December 31, 2022», the contents of which were incorporated in Annex 18, approved by Article 3, paragraph 1, letter r), of the Law of the Sicilian Region No. 3 of February 22, 2023 (Budget of the Sicilian Region for the three-year period 2023-2025).

At the same time, Article 53 of the Law of the Sicilian Region No. 2 of February 22, 2023 (Regional stability law 2023-2025), provided that «[a]s a result of the provisions referred to in Article 1, paragraphs 841 and 842, of Law No. 197 of December 29, 2022, for the financial years 2023 and subsequent years, the provisions referred to in paragraph 2 of Article 5 of Regional Law No. 30 of November 6, 2021, shall cease to be in force».

As of January 1, 2023, therefore, the temporary path of repayment from the overall deficit would have been calibrated on the quantifications and on the timeframes calculated according to the new legislation (as indicated in point 3.5 of the referral order).

Finally, the judge a quo acknowledges that the legislative procedure for the repeal of the challenged Article 7 of Legislative Decree No. 158 of 2019 is underway, the relevant regulatory scheme having already been approved by the joint parity commission provided for in Article 43 of Royal Legislative Decree No. 455 of May 15, 1946, converted into Constitutional Law No. 2 of February 26, 1948 (Approval of the Statute of the Sicilian Region).

The special regulation of deficit repayment established by the state legislator was, lastly, amended following the agreement signed on October 16 by the Minister of Economy and Finance and the Sicilian Region, incorporated in Article 9, paragraph 2, of Decree-Law No. 145 of October 18, 2023 (Urgent measures in economic and fiscal matters, in favor of territorial bodies, to protect employment and for unavoidable needs), converted, with amendments, into Law No. 191 of December 15, 2023, which intervenes directly on the aforementioned Article 1, paragraphs 841 to 845, of Law No. 197 of 2022. As a result of the aforementioned legislative interventions, the deficit of the Sicilian Region is currently subject to the following regime: «841. In implementation of the principles of balance and sound financial management of the budget, of responsibility in the exercise of the electoral mandate and of intergenerational responsibility, pursuant to Articles 81 and 97 of the Constitution, starting from the financial year 2023, the Sicilian Region is authorized to repay within a maximum limit of eight years the deficit relating to the financial year 2018 and the related deficit quotas not recovered as of December 31, 2022, according to the methods defined in the agreement between the Minister of Economy and Finance and the President of the Sicilian Region signed on October 16, 2023. 842. Pending the approval of the financial statements for the financial year 2022, the quotas of the deficit to be repaid pursuant to paragraph 841 are determined with reference to the administration deficit ascertained in the financial statements for the financial year 2018. Following the final ascertainment of the administration deficit relating to the financial year 2022, the law of the Sicilian Region approving the financial statements relating to the financial year 2022 redetermines the constant quotas of the deficit relating to the financial year 2018 to be recovered annually by the financial year 2030. 843. In the event of failure by the Region to comply with the specific commitments deriving from the agreement referred to in paragraph 841, the multi-year repayment regime according to the methods identified in the same agreement ceases to apply and the ordinary repayment regime provided for in Article 42 of Legislative Decree No. 118 of June 23, 2011 applies from the financial year in which the failure to comply with the commitments undertaken is ascertained or from the immediately following financial year if the ascertainment takes place after the deadline for the deliberation of the necessary budget changes».

Furthermore, in order to respect the commitments undertaken with the new agreement regarding the methods of financing health expenditure, Article 9, paragraph 1, of Decree Law No. 145 of 2023, as converted, expressly prescribes that: «[i]n implementation of point 9 of the Agreement on public finance, signed on October 16, 2023, between the Minister of Economy and Finance and the President of the Sicilian Region, the amount of 300 million euros is recognized in favor of the Sicilian Region for the year 2023 as a contribution to the burden deriving from the increase in the regional co-participation quota in health expenditure to 49.11 percent referred to in Article 1, paragraph 830, of Law No. 296 of December 27, 2006. The burden deriving from this paragraph, equal to 300 million euros for the year 2023, is provided for pursuant to Article 23».

The referring judge argues, however, that the described regulatory framework that has intervened in the meantime would not affect the relevance of today's questions, since the new provisions would relate to the financial planning starting from the financial year 2023, while the management events reported in the equalization proceedings for the financial year 2021 would be regulated by the previous legislation.

1.4.– Regarding the non-manifest lack of merit of the questions, the referring court reports that Article 7 of Legislative Decree No. 158 of 2019, in the version applicable ratione temporis, and Article 5 of the Sicilian Regional Law No. 30 of 2021, by establishing ad hoc substantial rules in the territory of the Region, would constitute a derogation from the «uniform model» outlined in Article 42, paragraph 12, of Legislative Decree No. 118 of 2011, which represents an intermediate rule with respect to Article 117, second paragraph, letter e), of the Constitution. This derogation would also entail a violation of Articles 3, 5, 81, 97, first paragraph, and 120, second paragraph, of the Constitution.

1.4.1.– Regarding the infringement of the exclusive state legislative competence in the field of «harmonization of public budgets», the referring court states that it is aware of the fact that the relations between the regulation of budget harmonization and the autonomy of special statute regions are governed by Article 79 of Legislative Decree No. 118 of 2011, according to which the starting date and methods of application of the provisions of the same decree with respect to the regions with differentiated autonomy and the Autonomous Provinces of Trento and Bolzano are established, in compliance with the relevant statutes, with the procedures provided for in Article 27 of Law No. 42 of May 5, 2009 (Delegation to the Government in matters of fiscal federalism, in implementation of Article 119 of the Constitution), i.e. according to the "contractual" procedures provided for the implementation rules of the statute (judgment of this Court No. 178 of 2012 is cited).

Nevertheless, in the opinion of the referring court, the constitutional amendment of 2012, which introduced the principle of balanced budget in the Constitution, would have «immediately reverberated effects on the "deactivation” of the safeguard clause contained in Article 79 of Legislative Decree No. 118 of 2011, at least for the most qualifying aspects of harmonization, to which the matter of deficit repayment especially belongs». Differently opining, the Sicilian Joint Sections argue, would allow peculiar adaptations of the regulation through a normative source – the rule implementing special statutes – to which «the starting date and methods of application» are entrusted without reservations, with prejudice to the homogeneity of the accounting systems imposed by the constitutional principles in the drafting of public budgets.

It is from this perspective that, according to the judge a quo, one should read «the exceeding of the norms object of this referral from the limit of the legislative function legitimately exercisable in implementation of the Statute of the Sicilian Region» or through regional normative sources.

Moreover, the amendment made in 2021 to the text of Article 7 of Legislative Decree No. 158 of 2019, would have introduced for that financial year a «derogation from the derogation», an even more blatant surreptitious circumvention of the scope of «"first application”» within which the special regulation in question should allegedly have operated.

On the nature and rank of statutory implementation rules in the system of sources of law, the judge a quo states that, according to consolidated constitutional jurisprudence, they would prevail over ordinary laws (state and regional) within the scope of their competence and would assume a reserved and separate character with respect to that exercisable by ordinary laws of the Republic, with the consequence that the possibility of introducing a particular and innovative regulation in the legal system, through provisions of this rank, would be conditional on compliance with the limit of correspondence to the rules and the purpose of implementing the statute, in the context of the principle of regional autonomy (the judgments of this Court No. 316 of 2004, No. 353 of 2001 and No. 212 of 1984 are cited).

In the opinion of the judge a quo, however, accounting and budget regulations would not appear in the express list of objects of competence of exclusive and concurrent legislation, respectively contemplated by Articles 14 and 17 of the special statute, apart from the proximity to the matter of the organization of regional offices and bodies (Article 14, letter p). From this point of view, therefore, it would not seem that there is a correspondence between the challenged provisions and a specific statutory competence to be implemented.

Finally, according to the referring court, the reference contained in the challenged provision to Article 9 of Law No. 243 of December 24, 2012 (Provisions for the implementation of the principle of budget balance pursuant to Article 81, sixth paragraph, of the Constitution), where it is provided, in paragraph 6, that these provisions apply to special statute regions and the Autonomous Provinces of Trento and Bolzano «compatibly with the rules of the respective statutes and with the related implementation rules» would not seem convincing. The prescriptive content of Article 7, paragraph 2, of Legislative Decree No. 158 of 2019, in the opinion of the Sicilian Joint Sections, in fact, would go beyond the scope marked by Article 9 of Law No. 243 of 2012 with reference to the possibility of intervening with implementation rules.

1.4.2.– Also on the point of non-manifest lack of merit, the challenged provisions would also conflict with Articles 81 and 97, first paragraph, of the Constitution, under the profile of the infringement of the balance and sound financial management of the budget, as well as of the interdependent principles of multi-year coverage of expenditure, of responsibility in the exercise of the electoral mandate and of intergenerational equity; as well as with Articles 3, 5 and 120, second paragraph, of the Constitution, since the regulation for deficit repayment would provide an unreasonable preferential treatment for the Sicilian Region, deviating from the uniform state paradigm that outlines the financial and economic unity of the Republic, underlying the regulation of public finance (judgment of this Court No. 88 of 2014 is cited).

The regulation for the repayment of the deficit of the Sicilian Region provided for in Article 7 of Legislative Decree No. 158 of 2019, in the version applicable ratione temporis, and in Article 5 of the Sicilian Regional Law No. 30 of 2021, would not only have prevented significant portions of the administration deficit, not recovered as of December 31, 2018, from being repaid on the basis of the rule dictated by Article 42, paragraph 12, first period, of Legislative Decree No. 118 of 2011, but would also have determined the suspension of ordinary recovery obligations relating to all the other components of the deficit accrued as of December 31, 2018, thus exempting the Region from the application to the financial year 2021 of significant deficit quotas for over two billion euros.

From this point of view, the disparity of treatment would appear even more pronounced than that denounced (with the order of the same Joint Sections for the Sicilian Region No. 1/2023/PARI) in relation to the legislation applied in the financial year 2020, since the obligations to recover the quotas relating to the financial year 2021, suspended for the stated reason of «addressing the negative effects deriving from the Covid-19 epidemic», would not have been restored with a starting date as close as possible to the presumed time of cessation of the related causes linked to the health emergency, but «even postponed "to the year following that of the conclusion of the originally planned repayment”, thus unduly burdening future generations».

Finally, the referring court excludes the possibility of carrying out a constitutionally oriented interpretation of the challenged provisions, given their unequivocal literal tenor.

2.– The Sicilian Region has constituted itself in the proceedings, represented and defended by the Regional Advocacy, raising several reasons for inadmissibility and, in the alternative, the lack of merit of the questions.

2.1.– The regional defense first raises the inadmissibility of the questions of constitutional legitimacy for lack of the requirement of the pendency of the dispute before the referring judge, as provided for in Article 23 of Law No. 87 of 1953 and Article 1 of the Supplementary Rules for the proceedings before the Constitutional Court, having regard to Articles 11, paragraph 6, letter e), and 123, code of accounting justice.

The same defense reports that it appealed on December 27, 2023, before the joint sections in judicial composition against the operative part of November 25, 2023, prot. n. 255, of the decision on the general accounts of the Region for the financial year 2021, adopted by the Court of Accounts, joint sections for the Sicilian Region, in the council chamber of November 25, 2023, and read on the same date, also in the part in which it suspended «for the remaining ascertainments, the proceedings and, as a result, the final decision», simultaneously raising, with a separate order, questions of constitutional legitimacy.

The regional defense states that the Region had requested in that seat not to raise the question of constitutional legitimacy of Article 7 of Legislative Decree No. 158 of 2019, in the version applied ratione temporis, and of Article 5 of the Sicilian Regional Law No. 30 of 2021 and to annul the decision of the territorial Joint Sections.

According to the defendant Region, the referral order to this Court, of January 15, 2024, would be «devoid of procedural and substantial effects, as a consequence of the transfer of the dispute to the Court of Accounts, Joint Sections in judicial composition, as a result of the appeal of December 27, 2023, as subsequently integrated, brought against the decision of the territorial Joint Sections of the Court of Accounts, on the equalization proceedings of the general accounts for 2021». This is due to the alleged "two-phase" nature, but in a single instance (according to the provisions of Articles 11, paragraph 6, and 123, paragraph 1, of the code of accounting justice), of the equalization proceedings, where, in the event of an appeal before the joint sections in judicial composition against the decision issued on the equalization proceedings by the territorial joint sections, it would be determined – according to the regional defense – the «translatio of the cognition on the accounts to the "judge of the second phase”, within the limits of what is devolved to them as a result of the appeal (so-called "double perimeterization”, cf. SS.RR. sp. comp., judgment No. 9 of 2023, point 3.1.4)».

The proceedings before the joint sections in judicial composition would not, therefore, be a second-instance proceeding, but a remedy that moves the decision-making competence from the peripheral judge to the central sections, which would enjoy a full and exclusive judicial review on the evaluations of the territorial sections, «aimed at a novum iudicium and not a revisio prioris instantiae» (the judgments of the Court of Accounts, Joint Sections in judicial composition, No. 6 of 2020; No. 12 of 2019, No. 15 of 2019, No. 30 of 2015, No. 64 of 2015; and No. 3 of 2014 are cited).

In other words, the proceedings a quo, as a result of the devolution to the joint sections in judicial composition, would no longer be in progress before the territorial joint sections that raised the questions of constitutional legitimacy. It would follow that, once the appeal has been lodged, the requirement of the pendency of the dispute before the Sicilian Joint Sections would have ceased to exist.

2.2.– As a consequence of the appeal before the joint sections in judicial composition, the questions of constitutional legitimacy raised would in any case be inadmissible for lack of relevance, due to the first ground of the appeal, with which the Region asserted the violation and misapplication of Article 6, third paragraph, of Legislative Decree No. 655 of May 6, 1948 (Establishment of Sections of the Court of Accounts for the Sicilian Region), Article 41 of Royal Decree No. 1214 of July 12, 1934 (Approval of the consolidated text of laws on the Court of Accounts), as well as, where applicable, Article 1, paragraph 5, of Decree Law No. 174 of October 10, 2012 (Urgent provisions regarding the finances and functioning of territorial bodies, as well as further provisions in favor of the areas affected by the earthquake in May 2012), converted, with amendments,