The Constitutional Court found No. 119 / 2011 Coll.

The Constitutional Court's finding of 19 April 2011 sp. zn. Pl. ÚS 53 / 10 on the application for annulment of Act No. 348 / 2010 Coll., amending Act No. 96 / 1993 Coll., on Construction Savings and State Support of Construction Savings and on the Addition of the Act No. 586 / 1992 Coll., on Income Taxes, as amended by the Act No. 35 / 1993 Coll., as amended, and Act No. 586 / 1992 Coll., on Income Taxes, as amended

Valid
Contents
I. I./a I./b I./c I./d I./e I./f I./g I./h II. II./a II./b II./c III. IV. IV./a IV./b IV./c IV./d V. VI. VII. VII./a VII./b VII./c VII./d VII./e VIII. VIII./a „§ 4 § 8 „§ 36 VIII./b VIII./c VIII./d IX.
119
FIND
The Constitutional Court
On behalf of the Republic
The Constitutional Court of the Czech Republic decided on 19 April 2011 in plenary of the President of the Court and the Judge-Rapporteur Pavel Rychetský and the Judges Stanislav Balík, František Dykonomy, Vlastí Formánková, Már Güttler, Pavel Holländer, Ivana Janů, Vladimir Kořka, Dagmar Lastovecká, Jana Musil, Jiří Nykodým, Miloslav Excellent, Eliška Wagner and Michaela Židlická on the proposal of the Parliamentary Chamber of the Parliament of the Czech Republic, represented by Mgr. Bohuslav Sobotka, with the seat of the Czech National Council of Prague 1, on the repeal of Act No. 348 / 2010 Coll.
as follows:
I. Article III (1) in the part setting out the new version of § 4 (1) (s) of Act No. 586 / 1992 Coll., on Income Taxes, as amended, and Article III (2), (3) and (4) of Act No. 348 / 2010 Coll., amending Act No. 96 / 1993 Coll., on Construction Savings and State Support of Construction Savings and on Addition of the Czech National Council Act No. 586 / 1992 Coll., on Income Taxes, as amended by the Czech National Council Act No. 35 / 1993 Coll., and Act No. 586 / 1992 Coll., on Income Taxes, as amended, shall be deleted from the date of the declaration of finalisation in the Collection of Acts.
II. Articles I, II, III (1) in the part which repeals Article 4 (1) (s) of Act No. 586 / 1992 Coll., on Income Tax, as amended by Act No. 348 / 2010 Coll., and Article IV of Act No. 348 / 2010 Coll., amending Act No. 35 / 1993 Coll., as amended, and Act No. 586 / 1992 Coll., on Income Tax, as amended by the later Act, shall be repealed with effect from 31 December 2011.
Reasons

I.

Recital of the proposal
1. On 9 December 2010, the Constitutional Court received a proposal from a group of 45 Members for annulment under the heading of that Act (hereinafter referred to as "the contested law ') and its provisions in Article II, as well as the amended provisions of Act No 586 / 1992 Coll., on Income Tax, as amended. The contested Act amended and supplemented certain laws by establishing a special tax rate of 50% for contributions to natural persons under the Act governing building savings and State aid for building savings (" State aid'), to which a claim arose in 2010 and which was indicated by the construction savings bank after 31 December 2010. At the same time, the amount of the State aid advance was reduced from 15% to 10% of the annual amount saved up to CZK 20,000. The proposal complied with the requirements of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended.
2. By its substance, the objections raised by the contested law to the constitutional order relating to the way in which it was adopted and its content were raised. The appellants question the justification for the discussion of the draft law in a short procedure in a state of legislative emergency, which was intended to violate certain constitutional principles relating to the parliamentary procedure for the adoption of laws. Their objections are further directed at the fact that the extraordinary meeting at which the abridged negotiations on the draft of the contested law took place was convened only 40 minutes before the beginning of the procedure, as well as the limitation of the rights of the Senators elected in the October 2010 elections, since on 12 November 2010 the Senate discussed the draft of the contested law in a composition corresponding to its seventh term of office (2008-2010) and the newly elected Senators were therefore unable to take part in the hearing.
3. In relation to the content of the contested law, the appellants argue that the reduction of the State aid for 2010 by its retroactive taxation of a special income tax rate of 50%, as well as the reduction of the advance on the building savings contracts concluded until 31 December 2010, show the signs of genuine retroactivity and contravene the legitimate expectations of the building savings participants. This expectation is also based on the legislature's practice to date, which has so far respected the acquired property rights for the provision of certain assets, depending on the time of the conclusion of the construction savings contract. The legislator chose disproportionate means to promote the public interest in reducing the deficit of the state budget, thus not respecting the demand for a fair balance between that interest and the limitation of the fundamental rights of individuals.

I./a

Objection to abuse of the legislative emergency institute
4. According to the appellants, the draft of the contested law (together with three other draft laws discussed by a similar legislative procedure) was negotiated in an abridged procedure in a state of legislative emergency, without one of the grounds provided for in Article 99 (1) of Act No. 90 / 1995 Coll., on the Rules of Procedure of the Chamber of Deputies, as amended (hereinafter referred to as the Rules of Procedure of the Chamber of Deputies or the Rules of Procedure). In their proposal, they closely recap the course of the legislative procedure, stressing that the negotiation of the draft of the contested law preceded the content of an identical government bill. This proposal was put forward by the Government on 4 October 2010, with a view to applying the objections of the two parliamentary clubs against the Government's proposal to give its consent to the draft law at first reading, and against the subsequent parliamentary proposal to shorten the deadline for discussing the draft law in committee for 15 days, however, it withdrew it on 26 October 2010. On the same day, it decided to re-submit it together with the proposal to declare a state of legislative emergency due to the threat of significant economic damage and requested it to be discussed in an abridged hearing. In this regime, the proposal was discussed by the Chamber of Deputies in its second and third readings on 2 November 2010 at the 8th meeting of the Chamber of Deputies, which was convened on a proposal from a group of governmental Members.
5. In the appellants' view, the declaration of a state of legislative emergency and abridged action, without one of the legal reasons set out, constitutes not only an infringement of the law, but also a significant "tipping up" of the constitutionally protected freedom of parliamentary debate and Members' rights to make amendments and to perform their elected function properly. They refer to the legal conclusions contained in the finding of 7 September 2010, sp. zn. Moreover, in the case of the contested law, they stress the absence of consensus across the Chamber of Deputies on the legitimacy of the state of legislative emergency.
6. In view of the fact that the state of legislative emergency and the abridged conduct aimed at preventing the threat of fundamental rights and freedoms of citizens, the threat to the security of the state or to significant economic damage, at the same time, constitute an intervention in the rights of the House minority, the decision on its publication should be assessed by a three-step proportionality test, in terms of suitability, necessity and proportionality of intervention. In their view, there can be serious doubts as to the eligibility of this procedure to prevent significant economic damage to the State, since, unlike earlier cases, the government has failed to convince opposition Members of the need to approve the proposed laws in order to take effect no later than 1 January 2011. At the same time, the contested legislative procedure was not even necessary. In fact, the government could have achieved the objective pursued by submitting the draft law in a timely manner, which did not happen in view of the intention of the government majority not to discuss the draft law in the Chamber of Deputies before the municipal and Senate elections. On the other hand, the aim of this procedure was much more likely to prevent newly elected senators from taking decisions than to prevent significant economic damage.
7. Finally, the proportionality of this procedure can be questioned, as evidenced by the appellants by the dispute over the risk of significant economic damage, on the one hand, and, on the other hand, the undisputed degree of levelling of the freedom of parliamentary debate and the rights of Members on the other. If, in a state of legislative emergency, it is not possible for Members to approve a bill in the Chamber of Deputies in a single day, either to study it properly or to express their views on it in a fundamental way, or to mediate the views of their constituents or legitimate interest groups, which may be heard only through them on parliamentary ground. At the same time, the right of citizens to be heard is also reduced in an adequate spread of arguments for and against the law adopted which affects their fundamental rights.

I./b

Objection to unforeseeable calling of an extraordinary meeting of the Chamber of Deputies
8. Another objection from the appellants concerns the application of Rule 51 (6) of the Rules of Procedure, according to which Members must be informed of the call for a meeting of the Chamber of Deputies at least five days in advance. The contested law was approved at an extraordinary meeting on 2 November 2010, the interval between its appointment and the beginning of the meeting was only 40 minutes and the invitation was sent by e-mail only 7 minutes before its start. At the same time, the proposal by the Chairman of the ČSSD Bohuslav Sobotka to postpone the hearing until the second day, i.e. until 3 November 2010, was rejected, which was intended to allow all Members to prepare themselves properly for this meeting.
9. According to the appellants, that provision must be interpreted in the light of constitutional principles and values within the meaning of Article 22 of the Charter, according to which the legal regulation of all political rights and freedoms and its interpretation and application must enable and protect the free competition of political forces in democratic society. The five-day period provided for in Rule 51 (6) of the Rules of Procedure serves for Members to be able to familiarise themselves with the proposed agenda and prepare for its points, as well as to be aware of the meeting at all. The appellants do not question the possibility of shortening the five-day period, but consider it arbitrary if this is done without stating the reason. There was no argument or reason why a meeting was needed so quickly during the Chamber of Deputies' proceedings. The shorter the time between the meeting and the start of the meeting, the more serious reasons must be for such shortening.
10. In this case, too, that procedure should be subject to the proportionality test. This is a conflict of rights or protected values, where an interest in the speedy discussion of the draft law, because of the considerable economic damage, is necessary to measure the freedom of parliamentary debate already mentioned, as well as the rights of Members and citizens to participate in the administration of public affairs. At the same time, the appellants consider that this procedure would not have stood up to the second step of the test, namely the step of necessity. Even assuming that the adoption of the law by 1 January 2011 prevents significant economic damage from occurring, the same objective could be achieved by discussing it in the following days, i.e. 3, 4 or 5 November 2010, without the need to convene an extraordinary meeting in 40 minutes.
11. This procedure is considered by the appellants to be a violation of the political rights of opposition Members under Article 21 (1) and (4) of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as the Charter) and of the citizens under Article 21 (1) of the Charter. They note that it could only be considered necessary in view of another possible objective pursued to discuss an adopted bill in the Senate by 13 November 2010, i.e. the date of expiry of the mandate of Senators elected six years ago. However, this objective cannot be considered legitimate. In addition, there was a significant deterioration in the effects of the declaration of a legislative emergency itself, as it resulted in only four days between the submission of the bill and its approval, two of which were working, which could not be foreseen at the beginning of the fourth day.

I./c

Objection of refusal to vote for newly elected senators
12. In essence, the last objection in relation to the way the contested law was discussed and adopted was a disproportionate interference in the law of the Senators elected in 2010 to exercise their mandate under Article 21 (4) of the Charter. The mandate of these Senators was established pursuant to Article 21 (4) of the Charter by their election. However, when assessing the exercise of their right to vote, it was necessary to weigh conflicting constitutional values, that is, both the possibility for the Senate to comment on the draft law in the Constitution, set by a 30-day deadline, and an interest in the indisputability of the Senate resolution by any decision of the Supreme Administrative Court declaring the election of the Senator invalid. In doing so, the appellants consider it a sensible and balanced solution to the conflict in the way that, in the meantime, only one of its meetings, at which the newly elected Senators are not yet able to vote, and only the draft laws on which the 30-day period expires before the first meeting in the new term of office, are on the agenda.
13. The Government and the Government majority in the Chamber of Deputies and the Senate are described by the draftsmen as arbitrary. His aim was to make it impossible to discuss the Senate proposal properly, which could be attended by newly elected senators, and the government camp would no longer have a majority. They consider the negotiation of the contested law at the 25th Senate meeting on 12 November 2010 to be an intervention in the right of Senators to exercise their mandate unhindered, without prima facie seeing reasonable reasons for such action. They reiterate the need for a proportionality test to assess this interference in that right of newly elected senators. Although the examination of the contested law pursuant to Article 118 of Act No. 107 / 1999 Coll., on the Rules of Procedure of the Senate, as amended, (hereinafter referred to as the Senate Rules) was already eligible to accelerate the legislative process on 12 November 2010, such a procedure was not necessary in the light of the test. In fact, the 30-day period for discussing the draft contested law by the Senate ended on 3 December 2010, so the newly elected Senators were able to take part in the negotiations and were able to comment on it in a qualified manner as part of the debate. The rejection of a bill or its repayment with amendments on the last day of the deadline would not prevent its timely discussion. The Chamber of Deputies could renegotiate it within the meaning of Rule 97 (3) and (4) of the Rules of Procedure after 10 days, that is, as of 13 December 2010. In view of the improbable return of the draft law by the President of the Republic, there would therefore be no impediment to the publication of the law before the end of the year, even if the Senate and then the Chamber of Deputies were discussed a few days later. On the contrary, this would allow the Senate to fulfil its role and opposition effectively to exercise its rights in the legislative process, including the right to propose amendments.

I./d

Summary of alleged infringement of legislative procedure with constitutional order
14. In the light of the above objections, the appellants find the legislative procedures to be contrary to Article 1 (1) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution), namely with respect for the rights of man and citizen, according to which the restriction of fundamental rights and freedoms must be the result of a proper democratic discourse. The infringement of this provision is also seen in breach of the principle of legal certainty as part of the principle of the rule of law, in order to reduce the possibility of familiarisation with the new legislation and its reasons.
15. In addition to those principles, the violation also concerns the democratic principle of government for the people and of state power serving all citizens within the meaning of Article 2 (3) of the Constitution and Article 2 (1) of the Charter, since the right of citizens to know the reasons for a political decision has been cut short and the right to influence that decision by addressing their elected representatives. The appellants also object to an intervention in the free competition of political parties under Article 5 of the Constitution and Article 22 of the Charter, which includes the possibility of announcing opinions and making proposals in a proper parliamentary discourse. The reason for the breach of the principle of the protection of a minority pursuant to Article 6 of the Constitution, both by the House and the Senate and among citizens, was the impossibility for a minority of Members to properly exercise their mandate, in particular in a situation of unforeseen convened meetings, and the refusal to participate and vote in certain Senators. For these reasons, the voice of citizens opposed to the contested law could not be articulated by means of a proper parliamentary discourse.
16. At the same time, the appellants of the legislative procedure criticise the conflict with Article 26 of the Constitution and Article 21 (4) of the Charter as they have been hampered by the effective exercise of their mandate. Their right to the public office of a Member was also affected by an unforeseeable call for a meeting they could not prepare for. In the case of newly elected senators, the intervention concerned the excessive expedited conduct of the Senate, for which there was no legitimate reason and the effect of which the Senators were denied their right to participate and vote on the bill. The restriction was related to the right of citizens to participate in the administration of public affairs because, due to the lack of time, they could not do so, in particular, by addressing Members or by making effective use of the right to petition or collect, or the right to strike. Citizens elected to the Chamber of Deputies and the Senate were also limited to this right by not being able to participate effectively in a free parliamentary debate, nor to properly prepare and propose amendments. For these reasons, neither the substance nor the meaning of the legal restrictions on the rights of Members and Senators under Article 21 (1) and (4) of the Charter were investigated in contravention of Article 4 (4) of the Charter.

I./e

Objection to retroactive taxation of the building savings contribution
17. The appellants' main objection in relation to the content of the contested law concerns the unacceptable effects of genuine retroactivity on construction savings contracts concluded before 1 January 2011. As a result of the addition of the Income Tax Act and the transitional provision of Article II of the contested law, the legal requirements arising from these agreements and which were enforceable before the contested law was effective.
18. Paragraph 11 (1) of Act No. 96 / 1993 Coll., on construction savings and State aid for construction savings and on the addition of the Act of the Czech National Council No. 586 / 1992 Coll., on income taxes, as amended by the Act of the Czech National Council No. 35 / 1993 Coll., (hereinafter referred to as "the Act on Construction Savings") gives rise to the right of the participant of the building savings to be credited to his account on the amount of the annual advance of State aid, or to record on his account the amount of the assigned advances of State aid until their payment within the meaning of Article 12 (1) of the Act. The basic condition shall consist of the composition of the appropriate cash amount in the account specified by the building savings agreement. The entitlement to the State aid itself arises when the participant fulfils one of the two alternative conditions laid down in Section 12 (2) of the Building Savings Act.
19. It follows from the construction of this law that, by concluding a building savings contract, the building savings participant will be entitled to a pre-determined full amount of State aid to be paid to him if he fulfils the statutory conditions. This can be inferred, for example, from Section 5 (9) of the Building Savings Act, which shows that already at the time of the conclusion of the Building Savings Contract a target amount is set, including the total amount of State aid. The whole of the Building Savings Act is based on the principle that State aid is gradually attributed to the participant in the form of annual advances (e.g. § 5 (9), § 10 (1) to (3), § 11 (1) to (4), § 12, § 13 (1) of the Building Savings Act). Therefore, there is no redetermination of the amount of State aid each year according to the legislator's current intention. In fact, construction savings are based on their nature as a long-term legal relationship (see, for example, the length of the so-called binding period for the payment of State aid in accordance with Section 12 (2) or the length of the time limits laid down for the obligations of the building savings banks under Section 13 (4) of the Building Savings Act) and the participant of the building savings in its conclusion must be certain that the conditions for its duration by the building savings bank and, more importantly, by the State will not change shortly (let alone suddenly).
20. The contested law reduced the contribution both by taxing part of it and by reducing it, which also applies to contracts concluded before 1 January 2011 when the law became effective. This, moreover, results explicitly from the classification of the contested provisions, which refer to "the contribution... for which the entitlement was established in 2010... ', or" the building savings contract, regardless of the date on which the contract was concluded.' This adjustment reduced not only the amount of the State aid advances attributed since 2010, but also the conditions and total amount of the contribution, for which a pre-determined amount of payment was entitled, subject to compliance with the conditions laid down by law at the time of the conclusion of the contract, i.e. in particular to save a certain amount in the year in question. The contested provisions thus operate in the past.
21. In their further argument, the appellants cite in detail the grounds for the finding of 4 February 1997 sp. zn. They stress that, although false retroactivity is fundamentally permissible, it may also become constitutionally inadmissible if the application of the new legislation to old legal relations substantially affects the legal situation of the parties to rights and obligations. When assessing the constitutionality of a provision acting on the effects of false retroactivity, consideration should be given to the intensity of public interest with the degree of interference in the principles of equality and the protection of the citizen's trust in law. In this context, it also notes the explanatory memorandum to the draft law, although, at the same time, it comes to another conclusion that the change in the conditions of the building savings constitutes "the so-called false retroactivity, which is an acceptable solution in a democratic state. However, the draft law is affected by the constitutional principle of protecting legitimate expectations in existing legal relations... On the other hand, however, that measure follows the legitimate interest of the State in restoring public finances to the benefit of the whole company, i.e. it is proposed in the public interest. The fact that the proposed measure is consistent with the constitutional order in the context of a collision of those constitutional principles must be measured in terms of proportionality in relation to both constitutional principles. '
22. The appellants take the view that an amendment to the Building Savings Act, which would have entered into force on 1 January of a given year and would have changed the amount or conditions for the payment of the contribution for the previous calendar year, would have been clearly unconstitutional. However, it was already found that Article 36 (8) and some other provisions of the Income Tax Act, as amended, were contrary to the Constitution. In this context, they cite, in particular, the comments made by the Government's human rights agent, according to which the rules in force in 2011, even if they are paid (in the form of advances), cannot be applied to State aid which was already eligible in 2010. "The entitlement to state aid is established by law... by the end of the calendar year for which the aid is credited... i.e. in this case 31 December 2010. From the point of view of legal certainty, it is therefore necessary that the person who created the claim should know at the time of its creation all the conditions for its creation, the amount, the declaration, etc., as it is the property value which is conferred on him and which is therefore subject to the constitutional protection of property (Article 11 of the Charter of Fundamental Rights and Freedoms).... Thus, if, pursuant to the regulation in force from 1 January 2011, State aid for construction savings for 2010, which is income for the taxable period 2010, is taxed, it will be the case where the legal standard also relegates claims from the legal relationship arising before its effect, i.e. the case of genuine retroactivity which is incompatible with the principle of legal certainty and a democratic legal state under Article 1 of the Constitution. 'According to the Government Commissioner's comment, as a result of the determination of the tax in question in 2011, the obligation to tax income for the previous year, although no tax liability existed at the time of its creation, could therefore legitimately rely on State aid for 2010 not to be taxed and to remain fully its constitutionally protected ownership. In their comments, the Czech Banking Association, the Association of Czech Construction Savings Bank (" the Association') and the Czechoslovak Confederation of Trade Unions also expressed an objection to the unacceptable retroactivity of those provisions. They were also heard in the context of the debate on the bill in the Chamber of Deputies and the Senate.
23. Retroactive effects can be seen in other facts. At least until the adoption of the contested law, contracts establishing these claims were concluded by their participants in good faith based on legitimate reliance on the law. In doing so, it provided that for contracts concluded until 31 December 2003 the participant would receive an annual advance of State aid of up to CZK 4,500 and for contracts concluded from 1 January 2004 to 31 December 2010 up to CZK 3,000. The contested retroactive measure, however, resulted in a disproportionately reduced State aid to individual building savings participants depending on the date of conclusion of the contract. While the participants who entered into the contract until 31 December 2003 will be reduced by up to 56% from 1 January 2011 (decrease from CZK 4500 to CZK 2,000), the participants who entered into the contract after 31 December 2003 will represent only 33% (decrease from CZK 3,000 to CZK 2,000). However, there is no reasonable reason for such differentiation between the participants in the building savings. If this measure were to fall equally to all contracts concluded before 31 December 2003, it would have to fall not to CZK 2,000, but to CZK 3,000 at 33%. This disproportional effect is further exacerbated by the already mentioned tax refund of the State aid advance for 2010 at a special tax rate of 50%, so that for 2010 only CZK 1,500 will be reduced by the advance of the State aid to the participants with a contract concluded until 31 December 2003, whereas for the participants with a contract concluded after 31 December 2003.
24. The contested law also creates inequality within the group of building savings participants who entered into the construction savings contract until 31 December 2003 and are thus entitled to an advance of State aid of up to CZK 4,500 per year. In fact, if such a participant has entered into the amount necessary to credit the maximum amount of the State aid advance (i.e. CZK 18,000), for example by 30 April 2010, it has complied with the legal period of the building savings for the payment of the State aid advances pursuant to Section 12 (2) of the Building Savings Act and has terminated the contract at that date, then during 2010, these advances were still paid to it at the original amount, i.e. for 2010 at the amount of CZK 4,500. However, the advance on State aid for 2010 will be credited at a reduced rate in April 2011 to the other participants in the old contracts who have terminated the contract later or continue to save. This gives rise to two groups of participants who will receive different amounts of State aid for the same amount of their deposits over the same period.
25. Following the legal conclusions of the Constitutional Court contained in the already cited finding sp. zn. Pl. ÚS 21 / 96, the appellants state that the legislator could change the amount of State aid paid even for contracts in force at the time of the legislator's intervention only if "the importance of legislative wishes to the public 'exceeded the" individual's interest in the continued existence of existing law' or the individual's confidence in the continued existence of the legal standard. In this context, the appellants point out that, according to the explanatory memorandum, the proposed adjustment "reduced the burden on the State budget in connection with the payment of State aid, which does not fully lead to the financing of housing needs and draws the resources of all taxpayers for the benefit of only a part of the population, by reducing the State budget expenditure on the one hand, and by increasing revenues on the other hand 'and" levelling up the conditions for the taxation of interest income on deposits in the building savings with the conditions for taxation of a similar type of income on other bank deposit products'. According to the explanatory memorandum, the budget of the year 2012 is expected to reduce expenditure from approximately CZK 11.4 billion to CZK 6.5 billion. At this level, State aid expenditure should be stabilised for years to come. According to the submission report of the Ministry of Finance for the Government's negotiations, measures in the area of building savings are to bring a reduction in the burden for the 2011 state budget of CZK 6 billion, for the 2012 state budget of CZK 6.5 to 8.5 billion
26. The appellants believe that neither the government nor the parliamentary majority took into account the protection of fundamental rights and freedoms and the state's international obligations when adopting the contested law. Even if the contested law had not been adopted, the government would not have been effectively shortened in the use of the other instruments available to it to "restore" the state budget. However, it has again facilitated its role and sought the necessary sources of savings first on the side of reducing transfers to natural persons based on their claims. The trust of participants in building savings contracts in the continued existence of their rights is undoubtedly also shaped by previous legislative experience. This experience shows that the legislature has always maintained a double regime, i.e. a different arrangement for new and old contracts (proactivity), which is demonstrated, for example, by Article II (2) of Act No. 423 / 2003 Coll., which stated that "legal relations arising before the date of entry into force of the Act and the laws and obligations arising therefrom are assessed in accordance with existing legislation '. Even in the present case, building savings participants could therefore rely on the principle legislator to opt for a pro-activity regime in the event of another amendment. They could therefore legitimately expect the maintenance of the amount of the contribution, which, depending on the duration of the contract, belongs to them, whether CZK 4,500 or CZK 3,000, at least for the duration of the contract. Therefore, due to negative developments in the state budget, it could only be reduced for future contracts.
27. At the same time, the government and Parliament did not take account of the real ability of existing participants to escape without further sanctions in the period from the validity of the contested law to its effectiveness from the building savings, if this would not be advantageous to them after the change in legislation (for example, as a result of the fact that, in particular, contracts with a higher target amount, the length of savings will be significantly extended). Only a participant who has fulfilled one of the conditions laid down in § 12 (2) of the Building Savings Act is entitled to the payment of State aid advances, which always includes compliance with the so-called binding period of 6 years from the date of conclusion of the contract. It will therefore only be paid if the participant has not spent the amount saved during that period or has concluded a loan agreement from a building saving facility at that time and has used the saved amount, the money from that loan and the advance of State aid for housing needs. In other cases, the participant is not entitled to the payment of State aid advances and the building savings bank is obliged to return the State aid advances registered in the participant's account to the Ministry of Finance within the meaning of Section 12 (3) of the Building Savings Act.
28. However, the early termination of the construction savings contract may also be put at a disadvantage by a participant who has not yet saved the agreed target amount. The amount of the target amount agreed in the contract also corresponds to the amount of the fee for its conclusion. This fee amounts to up to 1,8% of the target amount for some contracts. The saving up to the agreed target amount is a condition for obtaining an additional interest rate advantage of 1% of the target amount and an interest rate advantage of 100% of the interest rate charged. Neither has the government and Parliament considered the impact on those participants who, on the basis of contracts concluded before the contested law, receive a loan from the building savings. For them, as a result of the amendment of the retroactive State aid amount, the loan repayment period is mainly extended or the amount due increased. It was also possible to consider a more gentle approach to participants in old contracts, in which, for example, for a certain legally limited transitional period, they would be guaranteed the granting of State aid advances at the original level, with the fact that if they wish to continue to save after a specified date, the total amount of State aid will be changed (reduced) in line with the new maximum amount of State aid under the new legislation.
29. However, the legislator gave participants only a very short time to respond to sudden changes in the building savings system. This also highlighted the intensity of the intervention in their rights, as the participant would undoubtedly decide its intentions differently if the law introducing major changes in the building savings were adopted at the beginning of the year when it had not already put its funds into the building savings, and otherwise it could decide at the end of the year, i.e. after it had already invested in the building savings during the year, and therefore legitimately expects a legally guaranteed return.
30. Therefore, if the period between the publication of the Law in the Collection of Laws and its entry into force was less than a month, in a situation where the Act was submitted only on 29 October 2010 and was approved in accordance with the above procedure, this period cannot be considered as appropriate for the possibility of an adequate response for more than 4 million participants in the building savings. Indeed, they were literally faced with a "done thing" within a few weeks, which means that their acquired assets will be shortened by the State in a short time. In the light of the short legiskance, even participants who have been under contracts for more than 5 or 6 years could not terminate the contract without a retroactive reduction in their contribution and without interest on them being subject to taxation in January 2011, as the period of notice for such contracts is usually three months. This is also true of the amounts saved in 2010, since even these taxpayers could no longer have been selected in time or otherwise.
31. The appellants thus summarise that the contested law has retroactive effects comparable to that of Constitutional Law No. 195 / 2009 Coll., shortening the fifth parliamentary term of the Chamber of Deputies, which was abolished by the finding of 10 September 2009 sp. zn. In fact, the conditions for the application of the basic right were set with retroactive effect, thereby changing the assumptions on the basis of the knowledge that individuals decided to conclude construction savings contracts. The law, contrary to the prohibition of retroactive activity arising from the rule of law under Article 1 (1) of the Constitution, in conjunction with the principles of the protection of the legitimate trust of individuals in the law and the protection of property rights, has intervened in their property rights based on knowledge of the conditions for their formation, including knowledge of their specific scope, i.e. the period and amount of the eligible performance. This intervention was made in an intensive way in relation to the essential elements of the democratic rule of law within the meaning of Article 9 (2) of the Constitution.

I./f

Objection of retroactive interference with property law (legitimate expectations)
32. According to the appellants, the contested law is also contrary to Article 11 of the Charter and Article 1 of the Additional Protocol to the Convention on the Protection of Human Rights and Fundamental Freedoms ("the Additional Protocol '). The Constitutional Court, in its findings of 17 June 2004, sp. zn. I. ÚS 642 / 03 (N 79 / 33 SbNU 259) and of 9 March 2004, sp. zl. ÚS 2 / 02 (N 35 / 32 SbNU 331; 278 / 2004 Coll.), has already provided protection for the legitimate expectation of satisfying the claim as a constitutionally guaranteed fundamental right in relation to the complainant's relations with the State. In this context, some of the decisions of the European Court of Human Rights (in addition to those decisions, the appellants also referred to the judgment of the Court of Justice of 6 October 2005 in Case 1513 / 03 Draon v France), in which the protection of legitimate expectations was granted and under which it was necessary to examine whether the interference with property law had pursued a legitimate objective, namely whether there was a public interest and whether it was in accordance with the principle of proportionality.
33. In the appellants' view, the decision on the use of enforcement measures in building savings aimed at saving state budget resources in order to reduce its deficit should pass a three-stage proportionality test, which is used by the Constitutional Court to assess the conflict of constitutionally protected values. In relation to the assessment of the component of necessity, they reiterate the possibility of adopting a law in advance, not a faulty legislative procedure. However, if the sign of necessity were to be understood in terms of the necessity of urgent savings on the part of the State budget due to efforts to reduce its deficit, the proportionality of such a step could be called into question in particular. While the level of risk of significant economic damage is quite questionable, the degree of doubt of the property rights of the construction savings participants concerned is undoubted. It therefore follows that the State's intervention in the property rights of the building savings participants incurred until 31 December 2010 is wholly disproportionate in terms of the funds used in relation to the limitation of ownership and the objective pursued.

I./g

Objection by the legislature to impose taxes
34. The appellants consider that a specific 50% tax rate has been set entirely arbitrarily without clarifying why the Government or the legislature is introducing a very high rate which is not comparable to any other tax rate. In this context, they point out and share the view of the Association of Czech Construction Savings Bank that a 50% reduction in State aid is linked to the systemic risk of a rapid and excessive outflow of deposits. According to the appellants, the State's intervention is disproportionate since, by abolishing the tax exemption on interest on deposits and advance payments, they will be taxed at a normal 15% income tax rate from 1 January 2011, whereas the advance on the 2010 contribution is to be taxed at a special 50% rate. In addition, for participants in building savings contracts concluded by the end of 2010, the amount of the advance on the contribution for this year is disproportionately determined also as a result of a comprehensive retroactive reduction in contributions for all contracts from 1 January 2011, which further deepens the arbitrage in establishing a specific tax rate for advance payments for 2010. At the same time, the appellants reiterate the temporal aspect of the suddenly introduced taxation. In general, they point to the legal conclusions contained in the Constitutional Court of the Czech and Slovak Federal Republic of 8 October 1992 sp. zn. Pl. ÚS 22 / 92 (Collection of Resolutions and Finances of the Constitutional Court of the CSFR, 1992, no. 11), according to which the State may not follow any procedure in determining the tax.

I./h

Objection of infringement of the protection of property (investment) and right of business in relation to owners of building savings banks
35. In conclusion, the appellants state that the contested law did not only affect the rights of the participants in the building savings, but also the rights of the owners of the building savings banks. For these entities, the new legislation is very likely to be reflected in the overall decline in the volume of deposits from building savings, which may lead to destabilisation of the business sector and to the destruction of investments made by building savings banks in good faith in relative stability of legislation. This may in principle affect their right to do business under Article 26 (1) of the Charter. In this context, they refer in particular to the RIA Final Report on the possible response of shareholders of construction savings banks, as well as to the comments of the Ministry of Industry and Trade and the Czech National Bank in the framework of the comments process.
36. International agreements for the protection and promotion of investment contain, by default, a commitment to fair and equal treatment of foreign investments, which consists in a guarantee that the legitimate expectations of foreign investors in maintaining a stable business environment will not be undermined, a commitment to provide foreign investment with full protection and security, which is a duty of the State to treat foreign investments with due care, which includes the prohibition of any arbitrary intervention in foreign investments and a commitment to refrain from the so-called indirect (de facto) expropriation of foreign investments, thus effectively withdrawing the benefit from the investment. By failing to respect the obligations of international investment protection treaties, the contested regulation infringes Article 1 (2) of the Constitution, which obliges the Czech Republic to respect its obligations under international law.

II.

Observations of the parties and amici curiae
37. The Constitutional Court, pursuant to Articles 42 (4) and 69 of the Law on the Constitutional Court, sent the application in question for the annulment of the contested provisions to the parties, namely the Chamber of Deputies and the Senate. At the same time, he requested the opinion of the Minister of Finance as a representative of the Ministry, which, in view of its competence, could state the relevant facts about the proposal, and the Association of Czech Construction Savings Bank, which brings together individual building savings banks operating in the Czech Republic.

II./a

Observations of the Chamber of Deputies and the Senate
38. The Chamber of Deputies, in its observations of 14 January 2011, signed by its President, Miroslava Nemcová, merely briefly summarised the course of the legislative process.
39. The Senate, in its observations of the same day, signed by its President Milan Štěm, summarised the course of the legislative process and the Senate debate, in which some Senators were alerted about the retroactivity of the bill. It also referred to its observations of 22 December 2010 on the case under page 5 of the ÚS 55 / 10 (see below), in which it expressed its views on the refusal to vote to the newly elected Senators. In this statement, he stated that the newly elected Senators could not attend the Senate meeting held on 12 November 2010 during the previous seventh term of office, because it was not confirmed at that time that their mandate as Senator had actually been established. Although the mandate of the Senator is established on the second day of the first round of elections, if elected in the first round, or on the second day of the second round of elections, if elected in the second round of the Senate elections, the Senators may not exercise their rights and duties in connection with the mandate until it is clearly confirmed that their mandate has been created. A decisive conclusion on the validity of the election or the election of the candidate, and thus the creation of his mandate, cannot be reached on the day of the end of the vote in the relevant round of elections to the Senate, in particular in view of the possibility of judicial review of the elections and the associated deadlines. The State Election Commission gives the Senators an election certificate by which the Senators prove their election, only if no electoral complaint has been lodged in their constituency, or, although it has been filed, but the Supreme Administrative Court has definitively rejected it.
40. In their observations, representatives of the two chambers gave their assent to the abandonment of oral proceedings within the meaning of Paragraph 44 (2) of the Constitutional Court Act.

II./b

Expression of the Minister for Finance
41. In his observations, the Finance Minister Miroslav Kalousek provided data relating to the number of contracts concluded, the development of the number of participants and the amount of State aid advances granted in each year. At the same time, he commented on the various objections of the appellants.
42. In his view, the taxation of State aid for 2010 does not constitute the use of genuine retroactivity nor can it be regarded as an unacceptable use of retroactivity for improper. In general, there are two systems, such as determining the moment of income creation. The first is based on the cash principle, according to which income is generated at the time of the physical transfer of values, in particular cash. It is typical of non-accounting persons, since they do not keep records of assets and liabilities to such an extent that it is always possible to determine the time at which they are entitled to the income in question. Another reason for its use is its simplicity, especially compared to the second system according to the current principle. This is based on the gradual formation of the total yield, the part of which can be attributed to different periods of time by calculation. This principle is typical of the entity as accounting is generally based on the current principle.
43. For the income of natural persons not covered by accounts, the basic rule is the taxation of income on the basis of the cash principle. On this principle, taxation of these revenues has been subject to taxation since the beginning of the Income Tax Act. As the State contribution is the income of a natural person who never accounts for his admission, the moment of the physical receipt of funds into the account of the authorised natural person is the decisive moment for taxing that income. The income, as a fact relevant to the income tax on individuals (subject matter of tax), is therefore only generated by the adoption of this transaction, in this case only in 2011.
44. The Minister for Finance therefore does not take the view that this is a genuine retroactivity, since the amendment of the Income Tax Act applies only and exclusively to the income generated (i.e. received by a natural person) after the contested Act, i.e. after 1 January 2011. In this context, the appellants confuse the moment of entitlement to income (meeting the conditions for a State contribution for 2010) and the moment of income (acceptance by a natural person in 2011) for income tax purposes. In addition, for the sake of completeness, it adds that the 2010 interest is credited at the latest on the last day of the calendar year, i.e. 31 December 2010, and therefore tax on withholding income tax at a rate of 15%, which will be effective from 1 January 2011, will not apply.
45. Thus, the contested regulation shows only false retroactivity because it does not interfere with legal claims created and adults on the basis of the original legal standard. The amount of State aid under the legislation shall apply until 31 December 2010 to claims for the effectiveness of the contested law. Only those claims arising after the effectiveness of this law, i.e. from 1 January 2011, are reduced. This therefore means that the amount of State aid for 2010 has not changed on the basis of a law effective in 2010. This aid is granted in full to the participants in the building savings scheme, only to State aid paid in 2011, i.e. 2011 income, applies a newly introduced income tax which corresponds to the constitutional authority of the State to impose tax obligations by law.
46. A partial reduction in the amount of State aid and a legal obligation to pay the tax arises as a result of a legitimate reason on the part of the State resulting from an increase in public debt. It is not possible to talk about the substantial intervention that would have been involved in the recovery of the State aid already granted. It is therefore not an unacceptable false retroactivity.
47. In relation to the principle of legitimate expectations, the Minister stated that they do not know this concept of the texts of the applicable legal standards and its application is largely the result of the legal theory and the judicial activity of the general courts and the Constitutional Court. It itself understands this concept as an interpretation of the right to a fair trial in the wider sense and as a guarantee of legal certainty derived from the existence of the rule of law. It is therefore the right to grant a legal property to the applicant in a situation where there is no legal entitlement to that property but, on the contrary, from the point of view of all aspects, it can be expected to be granted fairly, for example for the sake of the equality of all parties to the individual proceedings before the law. Moreover, the concept of legitimate expectations should be applied mainly in individual cases in specific proceedings. It is, above all, a protection against arbitrary state. On the contrary, in the event of a change to the law that causes the same consequences for all, its application is rather unnecessary.
48. It does not consider that entitlement to State aid was already established at the time of the conclusion of the construction savings contract but only after the legal conditions had been fulfilled. The amount of the State aid advance to which a civil savings participant is entitled can therefore only be determined on the basis of the resources put in the relevant calendar year. Thus, a building savings participant cannot legitimately expect State aid to be paid for an unlimited period of time, especially if the state's economic situation deteriorates significantly or the public deficit deepens. Such a situation then requires a response on the part of State budget expenditure, including the payment of state aid for building savings. The Minister of Finance also considers as a supportive argument that the signing of the contract does not give a precise amount of State aid and therefore does not qualify for a specific amount of State aid, that the participant in the building savings project can obtain the saved funds for maintaining the entitlement to State aid before it reaches the target amount, such as the termination of the contract after the so-called binding period or the acceptance of a loan from the building savings project. Similarly, some conditions of the contract may be corrected during the duration of the contract, e.g. the amount of the fees paid by the building savings bank.
49. In its observations, the Minister notes on the alleged reference of the appellants to the finding of 23 April 2008 sp. zn. If, according to that finding, it is not appropriate to argue with legitimate expectations in the case of the conditions and the amount of social security benefits, such an argument should not have a place even in the case of the conditions and the amount of State aid for building savings.
50. It has also expressed its views on the conditions for declaring a state of legislative emergency. In the absence of a timely amendment to the legislation which was the starting point for establishing an austerity budget, two situations could occur. In the case of budgetary provisions, the management would be governed by the volume of revenue and expenditure of the budget approved for 2010, when the government deficit was higher than the deficit approved by the State Budget Act of the Czech Republic for 2011. In the latter case, the budget would be approved without the effects of legislation approved in a state of legislative emergency, which would mean a substantially higher deficit of the state budget by approximately CZK 45 billion. At the same time, this would reduce the outlook of the Czech Republic, expressed by the share of the government deficit in GDP from 4.6% to 5.5%, which is a higher proportion than was approved for 2010 (5.3%).
51. Both of these situations would mean significant damage to the Czech Republic. The budget commission would be clearly interpreted as a sign of its internal instability and a signal that it is unable to push for reforms such as this to maintain the public deficit to an acceptable extent. By approving the State Budget Act with a higher deficit, the Czech Republic would take the opposite path to reducing the public deficit and implementing reforms. This would certainly change the position of credit rating agencies and market participants in the credit risk assessment of the Czech Republic on the domestic and foreign capital markets. Although the Czech Republic is in a significantly different position than Greece, credit assessment by credit rating agencies and assessment of the credibility of the debtor by the market could quickly turn to worse if the government stopped acting predictably, transparently and responsibly from a fiscal point of view. We could at least expect credit rating agencies to withdraw a positive outlook, unless a change in the outlook is a negative or an equal reduction in the rating of the Czech Republic. In this context, there would be a significant increase in the cost of operating government debt, at least as a result of a higher budget deficit and thus a higher government borrowing requirement in 2011 and a higher risk premium on government bonds.
52. For these reasons, the Minister of Finance is convinced that the legally required existence of a threat of significant economic damage can be considered justified. The reason why the government asked for a state of legislative emergency only after a failed attempt to discuss legal changes at first reading is that only when it was clear that early adoption by the Chamber of Deputies was not possible was the threat of significant economic damage to the real form. This was therefore a new fact, initially unknown and unpredictable, and it had to be adequately addressed by the government.
53. He also addressed objections in relation to the protection of property (investment). In his view, the constitutional order primarily protects the assets of existing and, above all, the assets acquired in a legitimate and undisputed manner. However, the fact that some value has been paid out in the past does not mean that the same expectation of its payment in the future becomes property protected by constitutional order.
54. The proposed measures to reduce fiscal expenditure and support fiscal revenue will apply directly to the participants in the building savings scheme themselves, and will only impact on the building savings banks indirectly. The State's decision on the duration and form of housing support is a sign of its sovereignty and must be taken in the context of the main public interest by the need to reduce the deficit of the state budget, which is currently considered a priority task with a social impact. The need for such measures has been recognised by the State for several years. In doing so, these measures will be effective uniformly on all those participants and cannot therefore be considered selective or discriminatory. Thus, it does not see a breach of the protection of property (investment) or the right to do business in a greater tax burden. Acceptance of the conclusion that the abolition of a certain tax advantage on a product provided by an entrepreneur is a breach of the protection of investment and the right to do business would practically mean the need to resign from any increase in taxes or the abolition of tax exemptions.
55. Despite the limitation of the state contribution, which is subsidised by the construction savings system as a whole, State aid for futuro remains. This, on the other hand, is an expression of the consideration of the legislator, which is preceded by the collapse of the building savings system, which could have consequences for both building savings banks and depositors. Indeed, removing the benefits of building savings would most likely lead to a decline in interest in deposits in building savings banks, which could have fatal consequences for their cash flow. Building savings banks are operating with state aid, and in the Minister's view it is logical and correct that state subsidy policy instruments do not create an unlimited constitutional order protected by the right of financial institutions to benefit from these instruments.
56. The Minister of Finance considers building savings to be a financial policy of its kind, which the State is burdened by its budget for the benefit of natural persons, because at some time there were substantive reasons to support a particular segment of the population and its savings activities. The aid was certainly not intended to promote business or other activities, nor did it have any indication of the element of long-term sustainability, not to mention that the system of building savings by nature cannot be fixed and eternal. At the same time, this institute is a supporting tool for the state, which has long supported middle and higher income groups. This in itself denies possible interference with social rights and, on the contrary, complements the reasonable justification of a law whose purpose in substance cannot therefore exceed the limits of constitutionality, because the State, in reducing aid, has acted accordingly in reducing support for the richer classes of the population (compared to the poorer classes that it does not save) in terms of general justice.
57. The appellants' objection that the participants in the building savings had a very short period of time to respond to the new conditions states that they calculate that period from the time of the publication of the law to its effectiveness. It recalls, however, that the legislation under discussion is based on the coalition agreement and the government's programming statement, which was known to the public and commented on by the regulator in the summer of 2010. Therefore, it does not agree with the argument that it was a sudden and for the first time in October 2010 the aforementioned adjustment, which could not be expected by the participants in the building savings system.

II./c

Expressions of the Association of Czech Construction Savings Bank
58. In its opinion of 14 January 2011, the Association of Czech Construction Savings Systems pointed out the basic characteristics of the building savings system. Building savings is a relatively closed system of participants that operates on a solidarity principle. A larger part of clients will save money so that other clients can borrow from their savings for housing. Other participants who do not use the loan option (so-called friendly clients) are in turn motivated by state aid for savings. According to statistics, the average deposit is currently approximately CZK 85,000 and the average loan exceeds CZK 510 000. The Czech building savings system therefore needs about five friendly clients to provide one average loan. Even clients who put their savings aside for a certain period of time in a building savings facility are thus desirable for the system to operate, as they make this money available to participants who want or need credit to finance their housing needs.
59. After the phase where the funds (especially until 2005) were accumulated in the Czech building savings to create a large and stable client collective, the credit phase has also strengthened the importance of recent years. This development is based on the existence of demand for housing loans and sufficient resources for building savings banks (i.e. client deposits) to provide loans. Both conditions meet the current situation and therefore building savings make a significant contribution to supporting the financing of housing within the Czech Republic when 997 400 active credit cases are currently registered. Without a proper flow of resources, construction savings banks will not be able to maintain the current level (volume and number) of loans in the future. Taking into account that in the long term the most common purpose of the loans granted is to finance the renovation and modernisation of housing, the reduction in building savings would have a negative impact on the progressive revitalisation of a neglected housing fund, since there is no comparable market alternative to such loans (mortgage loans are conditional on the cessation of real estate and consumer loans are offered at at least twice the interest rates).
60. At the level of the system, any restriction on the attractiveness of the product will result in a reduction in State aid for client outflows (savers) and without them it will not be possible to meet the demand of clients wishing to borrow. As a general rule, the change in conditions is done unilaterally. The conditions for the valuation of deposits are changed, but there is no change in the claims and conditions for the granting of loans from building savings. Building savings banks make long-term loans compulsory by law, which also assumes that the legislator will create a stable product framework for a period of real time corresponding to long-term loans, i.e. 15 to 20 years. However, other impacts, which are rather macroeconomic and social, can also be expected. Savings that serve as a source of credit are invested in the real economy through building savings, where they not only generate taxes, but directly support employment. This direct effect is unique among state-supported savings products. Moreover, no other state-subsidised product is as closely linked to its purpose of establishment as it is to the construction savings, as the granting of loans is fully linked to the housing purpose.
61. While the State's spending on supporting building savings is undeniable, since 2005 it has continued to decline, while the revenues generated by the taxation of economic activities, which, in view of the overall high amounts of loans granted annually, generate building savings, continue to grow and are currently stagnating or falling very slightly. The Association takes the view, on the basis of the basic context of the construction savings system described, that reducing expenditure on building savings will bring about major negatives, among which the most obvious include reducing the tax revenues of the State, reducing the availability of low-cost housing loans, increasing unemployment as a result of a lower volume of construction production, and limiting the system, which now brings strong positives for ever-declining State spending.
62. In relation to the objections concerning the legislative procedure of the association, it stated that it had already pointed out in its opinion in the context of the comment procedure the negative effects of the application of Paragraph 10 of the Building Savings Act, as amended by the contested law, on all construction savings contracts regardless of their date of conclusion. This is mainly an impact on the legitimate expectations of the participants in the building savings, who concluded their contracts by the date of the entry into force of the amendment, but in some cases will also be genuine retroactive effects. It believes that maintaining the existing system of building savings does not pose a threat of significant economic damage to the Czech Republic, which was a declared reason for adopting the amendment in a state of legislative emergency. In this context, he points to the study of the effects of building savings for the economy and society, prepared in August 2010 by Next Finance, s. r. o., under the guidance of Ing. Vladimir Picora, Ph.D. This study shows that a little over CZK 13 billion was paid out of state aid for 2009, while public budgets in taxes of more than CZK 25 billion were received from the building savings and the housing fund was invested only through loans of CZK 65 billion. The share of building savings in housing financing was between 40% and 60%. The study also shows that the spending of the state budget of CZK 1 billion on State aid generates at least 251 new jobs in construction (i.e. for 2009 at least 3,329 new jobs) as a result of the multiplier effects within the building saving system. This data shows that the construction savings are significantly involved in providing housing needs for the population.
63. By referring to the RIA report on the draft contested law of the Association, it points out, on the contrary, its possible consequence in the form of a risk to the liquidity of the building savings banks, which it sees as a real threat of major economic damage affecting the participants in and through the entire economy. This would, for example, be a lack of funds for the payment of terminated contracts or the impossibility of providing timely sound loans from building savings.
64. A one-off tax on State aid for 2010 is considered by the Association to be unconstitutional by an exceptional withholding tax of 50%, as the provision in question has genuine retroactive effects. As is apparent from Section 36 (8) of the Income Tax Act, as amended by the contested Act, as well as from Section 4 (3) of the Building Savings Act, in the current version, the right to an advance on State aid for 2010 was established in that year. In view of the conditions laid down in the Building Savings Act (in particular Sections 4 and 11 (1)), which relate to a specific calendar year in which the participant requests State aid, it is established, at the latest by the end of that year, whether all the circumstances justifying that year have been fulfilled. By making the contested law subject in 2011 to a retroactive income tax already due to an advance on State aid, it interferes with the legal consequences of past events which, according to the Building Savings Act, make the claim conditional on an annual advance on State aid and, as a condition of entitlement for 2010, have been fully implemented and completed in that year.
65. In addition, the contested law was published in the Collection of Laws until 8 December 2010, which, in the Association's view, also significantly affected the legitimate expectations of the building savings participants. In fact, they fulfilled the conditions of entitlement to an advance on State aid for that year throughout 2010 (in particular they made deposits in the accounts of construction savings within the meaning of Article 11 (1) of the Building Savings Act) in a belief based on the legal situation in force at the time and the experience that such deposits will receive an advance on State aid in the statutory and tax-free amount. As a general rule, new tax obligations are regulated by law, so that they are known before the beginning of the relevant tax period in which the income taxed by them is acquired so that the new legal situation can be adapted by the taxpayer to his behaviour. It is also surprising that the legislature now considers the participant's taxable income an advance on State aid. However, this is only registered in the building savings account within the meaning of Section 12 (1) of the Building Savings Act and therefore does not represent the actual available income of the participant at the time of its notification. This income will only happen after the completion of the entire saving, provided that the conditions for the payment of the entire State aid under Section 12 (2) of the Building Savings Act are met. The contested law is thus completely unexpected and, contrary to tax practices, only the expectation of future (plus conditional) income is taxed.
66. The Association further points out that the promoter of the contested law appears to have been aware of the threat of a potential breach of the prohibition of genuine retroactivity, since he chose a different method (one-off special tax) than for the following years to reduce the amount of the State aid advance for 2010. It is clear that the objective pursued by the two methods of reducing the amount of State aid enshrined in the amendment is the same, namely to limit the State aid for building savings to half for all existing and newly concluded contracts, as is the result of the political declarations of the current government coalition (see page 5 of the coalition agreements and the government's programming declaration). Since the introduction of this tax has the same economic effect on the parties as if it had a retroactive reduction in the State aid rate for 2010 for existing contracts, the chosen method of circumventing the constitutional prohibition of genuine retroactivity constitutes a legal act, which should therefore be assessed in the same way as an unlawful case of genuine retroactivity.
67. In line with the content of the proposal, the association also sees the adverse impact of the chosen regulation on individual groups of participants in building savings to a different extent, without any legitimate reason. On the one hand, there is a large group of participants, which will be reduced by the advance on State aid because their contracts will only be referred to in 2011 (see Section 36 (8) of the Income Tax Act, as amended by the contested law). On the other hand, there is a group of participants whose contracts were concluded by the end of 2003 and for which the Ministry of Finance applies in practice Section 11 (3) of the Building Savings Act, as effective until 31 December 2003. According to him, contracts that were concluded in the first half of the calendar year are applied for as from 30 June each year. Participants within this group have already been paid full and untaxed State aid for 2010, only on the basis of the random fact that the savings period for their contract for whatever reason ended in the first half of 2010. This fact is irrelevant from the point of view of taxation, since the nature of the income of the participants in the second group is identical to the income of the participants in the first group. It is still an advance on State aid for 2010, which should be treated in line with all its beneficiaries. The participants in the first group are therefore at a disadvantage compared to those in the second group by failing to close the construction savings contract in time. In view of the adoption of the amendment up to the end of 2010, these disadvantaged participants had neither the real opportunity to do so, thereby avoiding the adverse effect of an exceptional tax.
68. The attempt by the promoter of the draft contested law to circumvent the constitutional ban on genuine retroactivity is also evidenced by an unusually high rate of tax, which substantially changes the rate of appreciation of savings of the 2010 savings of the construction savings participants. This was rightly expected by the participants, as they relied on the legal situation that existed throughout 2010, when they provided their accounts with deposits that were relevant for the establishment of the claim. In practice, participants with a maximum State aid limit of CZK 3,000 per year (i.e. in particular those with contracts concluded from 1 January 2004 to the end of 2010) will be able to receive a maximum amount of CZK 1 500 for the 2010 State aid advance, thus not reaching the maximum amount of the State aid advance fixed for the next year (CZK 2 000), whereas those with an existing limit of CZK 4 500 (i.e. essentially participants with contracts concluded by the end of 2003) can receive up to CZK 2 250 for 2010. However, no legitimate reason for this different tax treatment was declared by the promoter of the amendment and, in the view of the Association, there is no such reason. Therefore, the association considers these disproportional effects of the amendment to be contrary to both the constitutional prohibition of discrimination and the constitutional principle of the protection of legitimate expectations of the addressees of legal standards.
69. In another part of its observations, the association also addressed the consequences of Article II of the contested law, according to which Article 10 of the Building Savings Act is to be applied to all construction savings contracts, regardless of when they were concluded. It considers as its most serious problematic effect the impact on the right to count the amount saved in the current calendar year and exceeding the maximum limit on which State aid can be claimed in that year to the basis for calculating State aid in subsequent years. In the case of construction savings contracts concluded until 31 December 2003, the legislation applicable until the end of 2010 was effective on the date on which they were concluded, allowing for the unlimited possibility of transferring the amount of the current year to subsequent years for the purpose of claiming State aid. Only later Law No 423 / 2003 Coll. by amending Paragraph 10 (4) of the Building Savings Act limited this possibility to contracts concluded from 1 January 2004, provided that these contracts had already been concluded from the outset with a requirement for State aid and this requirement had not been amended for the duration of the contract. The transitional provision of Article II of the contested law lays down these conditions for all contracts, irrespective of their date of conclusion, thereby generating a fundamental change of approach in relation to contracts concluded by the end of 2003. As a result, for contracts for which no State aid was requested for a certain period prior to their conclusion until the end of 2010, the participant will be withdrawn from 2011 from the right to include the amount saved from previous years into the basis for the calculation of State aid (and thus the ipso right to State aid from the entire amount of high deposits received until the end of 2010). In this regard, the Association sees the illegal legal retroactive effect of the contested law by making the existence of an already established right to transfer the amount saved up to future years for the purpose of claiming State aid conditional on additional facts. According to the expert estimate of the association, there are thousands of cases which arose mainly in connection with the reduction of State aid by Act No. 423 / 2003 Coll., when, in response to its transitional provisions, a number of participants entered into contracts without a requirement for State aid, requesting it by the end of 2004.
70. It also expressed doubts about the real meaning of the concept of "State aid claims arising before the date of entry into force of this Act ', which are to remain unaffected under Article II of the contested law. In fact, the Land Savings Act uses the term" claim "in the context of State aid in at least two different meanings, as a claim for the payment of an advance on State aid for a given calendar year (see Sections 4 (3), 10, 11 and 13 (1)) and as a claim for payment of all State aid still registered in the form of advances on the participant's account (see Sections 12 and 13). If the Ministry of Finance were based on a second interpretation, it would be necessary to reduce the amount of all advances still credited to the entire duration of the contract (i.e. up to a maximum of CZK 2,000 per year) for construction savings contracts for which the entitlement to State aid was not due by the end of 2010 and the resulting obligation to return the difference to the State. Such an interpretation would have led to an intervention in the already established State aid advances over the past years, as they have been (with the exception of the 2010 advance) The Ministry of Finance granted to participants and the building savings banks credited to their accounts under the conditions laid down by the Building Savings Act, as effective in the year in which the claim for the corresponding advance arose. This ambiguity is not in line with the expectations of good legislation, in particular the need for clear content of the rule of law so that its addressees can behave accordingly and that its unexpected interpretation cannot undermine their legitimate expectations.
71. In addition to the two most important impacts of Article II of the contested law, the application of the provisions on reduced State aid to contracts concluded by the end of 2010 will undermine the legitimate expectations of the parties to those contracts on the degree and speed of the increase of their assets in accordance with the legal status existing at the time of the conclusion of those contracts. In particular, there will be a deterioration in the savings savings of the building savings participants, directly as a result of the reduction of State aid, and indirectly by the fact that the participants will be subject to lower State aid and lower resulting interest. At the same time, however, the participant's entitlement to the proceeds of the building savings and a proper loan from the building savings will be delayed, as the condition of its creation is to achieve a certain proportion of the balance of the account to the target amount, while at the same time achieving the specified minimum savings performance of the participant given primarily by interest to the target amount. The implementation of both criteria is limited by lower savings appreciation intensity. Contrary to the original assumption when the construction savings contract is concluded, the time required for granting a proper loan by three months will be extended for a contract with a maximum State aid of CZK 3,000 per year by 2010 and for a contract with a maximum State aid of CZK 4,500 per year, even by 11 months. The effects of this can be individual and different depending on the purpose and how urgently the participant needs the funds from the building savings. This will mean a higher interest expense on the bridging loan for participants who have used the bridging loan (i.e. the loan also provided exclusively for housing needs defined by law, but only provisionally until the participant's entitlement to a proper savings loan is established). At the same time, the duration of this loan is extended, which is repaid on a one-off basis by the proceeds of the building savings and by the proper loan from the building savings on the date on which the right to a proper loan was acquired, with the obligation to pay interest on the whole of its unamortised amount for a longer period.
72. The above-mentioned direct effects on participants will also be moderately affected by the building savings banks to the extent that they reduce the attractiveness of the building savings product for new and existing contracts, thereby affecting the future behaviour of new and existing building savings participants on a large scale. These effects can be important for the stability of the building savings system, as the products of the building savings banks are set with the assumption of some long-term customer behaviour in the future. A possible lack of available resources to provide proper credit could result in the provision of which construction savings banks have firmly committed themselves to long-term construction savings contracts in the past. Intervention in the private-law contractual relationship between the building savings bank and the participants cannot be ruled out either. Although the granting of State aid is not the subject of a contractual obligation of a building savings bank towards a participant, it is directly linked to its contract, it contributes to the degree and speed of performance of the contractual obligations of the participants and of the building savings banks and, through the abovementioned direct and indirect effects, substantially affects the level and speed of achievement of the economic objectives which the participant intended to achieve when concluding the contract.
73. As a result of the contested law, the legitimate expectations of the parties to achieve the objectives pursued by them (i.e. the resources up to the target amount) at the originally planned time and at the planned costs were affected, as well as the rate of appreciation of savings, which were legitimately based on the legal status of the construction savings agreement without being able to respond adequately. If a participant had decided to terminate the construction savings agreement concluded before the contested Act became effective, it would not have fulfilled the condition for entitlement to the payment of State aid, as the termination would have resulted in the loss of all existing State aid (see Section 12 (3) of the Building Savings Act). In the case of contracts with a bridge loan, even without the immediate repayment of the loan at present, it would not be possible at all. In the past, in view of these consequences, the legislator maintained the existing State aid scheme in relation to contracts concluded before the amendment to the Act became effective. Thus, the departure from this approach in the case of the contested law, which also reduces State aid for existing contracts, is surprising for intertemporal participants and interferes with their legitimate expectations of future State aid levels. In this respect, the introduction of an interest income tax of 15% resulting from the abolition of the exemption of interest income from income tax provided for in Article 4 (1) (s) of the Income Tax Act, as amended before the contested law was effective, has a surprising impact on the participants.
74. In conclusion, the association stated that the building savings are fulfilling its purpose because at least 65% of the deposits collected by the building savings banks are used for special-purpose loans financing the housing needs of the participants, and even the participants who do not take credit often use the balance of the building savings account (according to the expert estimate of the association in two thirds of the cases) for housing needs. In addition, further credit expansion is directly restricted by the Building Savings Act, where limits are set for the provision of bridging loans and loans to legal persons that prevent even wider provision of these specific types of housing loans. Some construction savings banks have already had to reduce their trade policy with regard to the development of the deposit and credit portfolio by the limits set out in the law and the demand for these loans by various instruments. It therefore follows that the State fulfils its international obligations under the International Covenant on Economic, Social and Cultural Rights and Article 16 of the European Social Charter by means of a building savings scheme. Most of the funds are invested in a housing fund through special-purpose loans provided. Thus, the restrictive intervention of the State in a functioning system of building savings challenged by the Act with the above mentioned effects would undoubtedly not only limit the extent to which the Czech Republic fulfils its international obligations to ensure the social rights of citizens, but also intervened in the course of the implementation of private legal relations with the participants in the building savings and thus in their legitimate expectations of assessing their savings and the realisation of housing needs.
75. To the request of the Constitutional Court, the Association of Czech Construction Savings Bank provided models of construction savings contracts as well as the text of the general commercial terms and conditions of all construction savings banks operating in the Czech Republic, including their wording for individual past periods.

III.

Replication of the applicants
76. By letter dated 23 February 2011, the appellants replicated, through their representative, the observations sent, in particular the comments of the Minister of Finance and the Association of Czech Construction Savings Schemes. In their comments they indicated that they were in agreement with and refer to the conclusions contained in the Association's comments. However, the Minister of Finance does not agree with the argument.
77. The appellants' disapproval concerns, in particular, the conclusion that the actual retroactivity of the contested law against the resulting legal claims is excluded by reference to the moment when the income is generated as a "physical transfer of values," which takes place only after the amendment has been effective by "accepting the State contribution by a natural person in 2011." The effect of the contested law is clearly such that the new tax affects the assets already incurred before it is effective, namely the claim to the adult by 31 December 2010 at the latest. Nor does this change the fact that this claim (claim) can be satisfied, depending on the time of its creation, after the application of the law, i.e. after 1 January 2011.
78. The determination of the operative event for the application of the exceptional taxation of State aid advances for 2010 by the use of the definition that "the contribution... was shown to the construction savings bank after 31 December 2010 'is, according to the appellants, a manifestation of the legislature's insolence. In particular, a participant in a building savings project has no influence over whether and when the advances of the building savings facility by the Ministry will be paid. In this context, they point out that the Ministry of Finance is obliged to point out to the construction savings bank the amount of annual advances of State aid within two months of receipt of the request. However, in the case of incomplete or incorrect data, the Ministry may request a supplement or correction of the application, while the deadline for referring advances does not run until the application is completed or corrected (Section 11 (4) and (5) of the Building Savings Act). Thus, the participant could in theory influence whether or not it would be a tax payer only because it had fulfilled the condition to credit an advance on State aid for the year during 2010.
79. The artificial construction that the taxed property (income) is created after the contested law has been effective is designed to ensure that the State avoids its obligations against a large proportion of the participants in the building savings, which it would otherwise have had to satisfy, as it "acquired a claim in 2010 '. Indeed, it could hardly stand the view that a change in the rate of income tax or the introduction of a specific rate of income tax from 1 January of a calendar year should also have an impact on the revenue legally incurred until the end of the previous year, but not until 31 December of that year. Thus, the remuneration for December would have to be taxed at a higher rate only because it was paid in January, or an increase in the rate of value added tax, which will take effect from 1 January, would have to apply to taxable transactions carried out in December of the previous year only because the invoice was paid to the customer and the amount credited to the supplier's account in January. This construction seeks to pretend that the claim for which the claim (i.e. property or property value) has been established only when the financial amount corresponding to its satisfaction has been credited (and in this case even registered, not accepted) to the creditor's account.
80. Nor does the appellants agree with the legal conclusion that, as a result of the contested law, only those claims which arise only after their effectiveness are reduced. In their view, the Minister of Finance does not distinguish between the binding meaning of the legal terms "contribution 'and" advance' of the contribution (State aid). By reducing the State aid advances as from 1 January 2011 for contracts concluded before its effect, the contested law reduced their overall amount retroactively. Therefore, it did not only affect claims arising after its effectiveness. Although in this case it could only be an improper retroactivity of the law, since reductions are without prejudice to advances in the contribution granted for the years up to and including 2010, the effects of the amendment are such that they substantially undermine the legitimate expectations of the participants in the construction savings contracts which they had at least until the adoption of the contested law. As stated in the expression of the Association of Czech Construction Savings Bank, this reduction in State aid advances may even have real retroactive effects in many cases.
81. They refer to that part of the Minister's argument that the contested law did not reduce State aid for 2010. In his view, this will be granted in full, only as income for 2011 will the newly introduced income tax be applied to it. The appellants believe that the Minister is merely trying to justify why he was actually abusing the tax institute. The reason for this was to circumvent a method of direct reduction of the amount of State aid which was no longer available for claims arising in 2010 for time reasons. Nor do they agree with his view on the impossibility of using the concept of legitimate expectations in the event of a change of law that gives rise to the same consequences for all. It may also be affected by the legitimate expectations of the parties to legal relations through the adoption of legislation, referring in this respect to the "rich 'case law of the Constitutional Court and of the European Court of Human Rights, in part quoted in the original submission.
82. The appellants criticise the Minister's comments on the disinterpretation of the actual content of their proposal. In that case, it does not claim that the entitlement to State aid arises without further action at the time of the conclusion of the construction savings contract, nor that the signature of the contract is "precisely the amount of State aid '. On the contrary, they merely point out that already at the time of the conclusion of this contract, the so-called target amount from which the total amount of State aid is based is already possible, with the entitlement to its credit and its payment being due only by fulfilling all other legal conditions which are already known to the party at the time of conclusion of the contract and which cannot be changed suddenly.
83. The content of their proposal was not even a claim that the participant in the building savings could "legitimately expect that the State-guaranteed aid to be paid for an unlimited period of time..." The applicants merely pointed out the difference between the approach of the former legislator, which respected the acquired rights of the participants in the building savings (see Article II (2) of Act No. 423 / 2003 Coll.) and the current legislator, which does not do so in the contested law. The government and Parliament have not considered the intensity of intervention in the legal status of both building savings and building savings banks, and have not chosen any more gentle approaches to contract participants, particularly those who have not yet had the so-called binding period and those who receive bridging or building savings. A group of Members therefore took the view in the proposal that the existing approach of the legislature had established legitimate expectations for participants that the State could reduce the contribution, but only for new contracts, and that, during the term of the contract, the contribution would be granted at the initially guaranteed amount. According to the appellants, the contested law has been affected by the right of property protection under Article 11 of the Charter and Article 1 of the Additional Protocol. At the same time, they agree with the argument contained in the Association of Czech Construction Savings Institutions that the State has contributed to the fulfilment of its obligations under Article 11 of the International Covenant on Economic, Social and Cultural Rights and Article 16 of the European Social Charter (right to housing) by supporting construction savings. The effects of the contested law limit the scope of the provision of these obligations by the State.
84. In relation to the rationale of the declaration of a legislative emergency, the appellants add that it is highly likely that if the contested law had not entered into force on 1 January 2011 and the measures contained therein would have had to be postponed for a year, the State would not have been burdened by the granting of State aid in 2011, even to the extent that it would have provided it in 2010 (let alone in previous years), but would have been significantly less burdened without that law. They refer to the figures contained in the Minister of Finance's reply, as well as the comments of the Association of Czech Construction Savings Institutions, according to which the total amount of State aid (and thus the burden on the state budget) has a declining trend since 2005, with the biggest decline occurring in recent years, i.e. between 2008 and 2009. At the same time, the Minister of Finance should make available data on the actual amount of the State aid advance paid for 2010, as these data are undoubtedly relevant to answer the question whether there was indeed significant economic damage to the State when adopting the law.
85. In addition to the statement by the Minister of Finance that the Government asked for a state of legislative emergency only after a failed attempt to discuss the legal changes at first reading, the Government had to be aware of the deadlines in the legislative proceedings as well as of the opposition positions, which was finally admitted by Prime Minister Petr Nečas in his statement before the Constitutional Court on 8 February 2011 in Case 55 / 10.
86. Nor can it be agreed that the "main public interest" in the Czech Republic is the "need to reduce the deficit of the state budget." The public interest thus formulated does not support any constitutional or legal standard. On the contrary, the appellants consider the main public interest of fulfilling the constitutionally guaranteed fundamental rights and freedoms, because respect for them and their protection is the purpose of a democratic state. They do not call into question the need for sound public finances, but concrete measures to restore them are always a political decision of the current majority (Article 6 of the Constitution), and the issue of maintaining fundamental rights is always ultra vires in the political decision of the government or Parliament. Moreover, if the Minister of Finance contends that there is such a defined public interest, a test of consideration of the primacy of the constitutional protection value or fundamental right in the event of a collision should have been included in the explanatory memorandum to the draft contested law in accordance with the criteria defined by the constant case-law of the Constitutional Court.
87. The saving measures in the area of housing aid have not been "notified by the State for several years," as demonstrated by the fact that no State authorities have reported such measures in their conceptual materials in the area of building savings support. This was not done by political parties as part of the election campaign and their programmes. However, as they add, the very fact that these measures were mentioned in the coalition agreement and the government's programming declaration does not have any relevance to the addressees of the legislation until they are made binding in the formal source of the law. Both the coalition agreement and the government's programming statements are documents of a purely political nature, and the addressees of the law are undoubtedly not obliged to read such documents or listen to the media speeches of politicians and "arrange" according to them before the law was declared in the Collection of Laws.
88. As regards the claim that the construction savings banks "operate with State aid 'and that" State subsidy policy instruments do not provide for an unlimited constitutional order protected by the right of financial institutions to benefit from those instruments', the appellants point out that the State aid does not belong to the construction savings banks but to the participants in the building savings, while the participant is entitled to the payment of State aid only during the period of saving, i.e. solely on the basis of its own deposits. If the conditions for the payment of State aid are met, the building savings bank is obliged to pay it to the participant, on the contrary, if the legal conditions are not met, the building savings bank must return it to the State under Section 12 of the Building Savings Act. They stress that even construction savings banks are entitled to such action by the authorities of the State, which is predictable, does not show obvious characteristics of indiscretions and thus does not affect the substance of the right to do business and the rights enshrined in international agreements for the promotion and protection of investment.
89. In conclusion, the appellants respond to the Minister's statement that the construction savings "long-term support for middle and higher income groups," which in itself denies possible interference with social rights... "They do not know that the State has data on the income structure of the building savings participants and do not identify with a miniature understanding of social rights, according to which these rights appear to belong only to the income weaker population. They stress that the essence of their proposal is not the alleged interference with social rights, but the interference with property law in violation of constitutional principles of the rule of law.
90. By letter dated 15 March 2011, the appellants gave their assent to the abandonment of oral proceedings.

IV.

Assessment of the competence and constitutional conformity of the legislative process
91. According to Article 68 (2) of the Law on the Constitutional Court, the assessment of the constitutionality of the law or of any other law consists of three components. It is a question of whether a law or other legislation has been adopted and issued within the limits of the Constitution, whether it has been adopted in a constitutional manner and whether its content complies with constitutional laws and, in the case of other legislation, with the laws.

IV./a

Summary of the legislative process
92. The Constitutional Court found the following from the observations of the parties, as well as from the shorthand reports of the Chamber of Deputies and the Senate and other publicly available documents relating to the legislative process.
93. On 4 October 2010, the Government of the Chamber of Deputies submitted a draft law amending Act No. 96 / 1993 Coll., on Construction Savings and State Support for Construction Savings and on Addition of the Czech National Council Act No. 586 / 1992 Coll., on Income Taxes, as amended by Act No. 35 / 1993 Coll., as amended, and Act No. 586 / 1992 Coll., on Income Taxes, as amended, approved by Government Resolution No. 669 of 22 September 2010. At the same time, it proposed a bill so that the Chamber of Deputies could agree with it at first reading within the meaning of Rule 90 (2) of the Rules of Procedure. The proposal was circulated to Members as House Press No. 116 / 0. The Organising Committee, in its Resolution No 32 of 14 October 2010, recommended the discussion of the draft law, designated the rapporteur and ordered the proposal to be discussed by the Budget Committee. The first reading was started at 14: 20 p.m. on 26 October 2010 at the 7th meeting where the proposal was discussed in the general debate. Even before this proposal was put forward by the petitioner, the President of the Chamber of Deputies received an objection from the ČSSD to the discussion of the proposal in order to give his consent to the bill at first reading, which made it innegotiable. Subsequently, during the general debate, the Minister for Finance and Mr Miroslav Kalousek proposed, pursuant to Rule 91 (2) of the Rules of Procedure, a shortening of the bill in committee to 15 days. However, this proposal was not even discussed as a result of the objection of the CSRS and KSČM clubs. The Chamber of Deputies subsequently ordered the bill to be discussed by the Committee on Budgets (Resolution 102).
94. On the basis of its Resolution No 758 of 26 October 2010 (adopted on the evening of that day), the Government withdrew the bill (together with three other government bills) on 27 October 2010. On 29 October 2010, the Government of the Chamber of Deputies submitted a bill of completely identical content, approved by Resolution No 759 of 26 October 2010. At the same time, it proposed to the President of the Chamber of Deputies to declare a state of legislative emergency for the period from 1 November to 5 November 2010 for the discussion of the same government bill (together with the three bills mentioned) and to decide that those government bills will be dealt with in a shortened negotiation as part of the declared state of legislative emergency. The same day, the bill was distributed to Members as House Press No. 157 / 0 (as well as the other three government bills - House Prints No. 155, 156 and 158).
95. On the basis of this proposal, the President of the Chamber of Deputies declared a state of legislative emergency for those draft laws from 1 November 2010 to 15 November 2010 (the Government proposed only until 5 November 2010) and Decision No 8 of the same day decided that these proposals would be dealt with in a short procedure. At the same time, by this decision, it ordered the draft law to the Budget Committee, which set an inexcusable deadline for the submission of the resolution by 2 November 2010 at 12.00. On 29 October 2010, a bill as Parliament Press 157 was distributed to Members.
96. The Prime Minister's request to declare a state of legislative emergency, as well as the relevant decision by the President of the Chamber of Deputies, contained only a brief justification for the threat of significant economic damage without further specification of the threat. On 27 October 2010, Prime Minister Petr Nečas stated further reasons for the announcement as part of the debate on the draft State Budget Act at the 7th meeting of the Chamber of Deputies, when he informed Members of the said procedure in his speech. In particular, he stated that "failing to transpose these laws would mean that they would not come into force on 1 January next year, which would only make the budget a set of many tens or hundreds of pages printed with figures, but not supported by real real data on both the income and expenditure side, i.e. a budget that would be completely hypothetical, unrealistic, and hence a budget that would not be regarded as a credible document. For this reason, there would be a significant deterioration in the position of the Czech Republic on the financial markets. With this unreliable budget, the rating of the Czech Republic could be jeopardised, there would be an increase in debt service, that is, the instalments we pay in interest on national debt. Of course, a very important risk would be a significant deepening of the public deficit, and tax evasion would also be imminent. In these circumstances, when there was a threat of such great economic damage, the Government was obliged to apply the provisions of the Legislative Emergency Act to prevent such significant economic damage." (Steadpiece Report of the Chamber of Deputies meeting on 27 October 2010, 7th meeting, www.psp.cz)
97. On 2 November 2010, at 2 p.m., the President of the Chamber of Deputies opened the fourth day of its adjourned meeting, at which he informed Members of his decisions. Having regard to the obligation of the Chamber of Deputies to examine, before discussing the draft laws, whether the state of legislative emergency is still in progress, it has launched a debate on this point at the beginning of this sitting. During the debate, Mr Bohuslav Sobotka, who expressed reservations about its progress, spoke out. He pointed out that the discussion of the bills in question at the current meeting of the Chamber of Deputies envisages a proposal to include these items on its agenda. However, such a proposal cannot be debated if at least two parliamentary clubs or 20 Members object to it, as it did on behalf of the ČSSD and KSČM parliamentary clubs. After a brief debate, the President of the Chamber of Deputies announced at approximately 3: 20 p.m. that he was interrupting the meeting of the 7th Chamber of Deputies meeting and, at the request of a group of coalition Members, called a meeting of the Chamber of Deputies from the chair of the extraordinary 8th Chamber of Deputies meeting at 4: 00 on the same day. The meeting was also opened at this time.
98. Opening of 8th Meeting The Chamber of Deputies, its President, has re-informed Members of the declaration of a state of legislative emergency and has launched a debate to assess it. As part of this discussion, Prime Minister Petr Nečas, who, on the grounds of the declaration of legislative emergency, stated that "if a state budget is approved, which will not be supported by effective legislation on 1 January next year, which will be effective from 1 January next year, it will be an unreliable document based only on the sum of figures that will not correspond to the actual legislation effective from 1 January next year. That's a very serious threat. Then action, such as the deterioration of the outlook for the rating of the Czech Republic, may also be taken. Here I would like to emphasise that fluctuations in only a few percent make debt service payments up to billions in debt service, there is a risk of an increase in the government deficit and an increase in the public budget deficit as a whole, and there is also a clear risk of tax evasion. The total sum of these economic losses is rather in the billions, in a double digit number of billions. Thus, these are very important economic damage and, in accordance with the law, the government had to respond to it and had to apply for a state of legislative emergency precisely so as not to cause such serious economic damage."
99. Among other things, opposition Members Jeroným Tejc, Lubomír Zaorálek, Vojtěch Filip and Bohuslav Sobotka spoke in the debate, who expressed objections in relation to the reason for the declaration of a state of legislative emergency. MEP Bohuslav Sobotka proposed a postponement for the next day, i.e. until 3 November until 9: 00. 74 of the 181 Members present voted in favour, 103 opposed. In order to confirm the duration of the legislative emergency, 105 of 151 Members present voted against (resolution 111).
100. The second and third reading of the proposal took place on the same day. Even before the start of the second reading, the Chamber of Deputies stated that there were still conditions for discussing the government bill in a brief hearing (Resolution 116). 97 of the 146 Members present voted in favour, against 43. The Committee on Budgets met with the relevant House Press, recommending that the Chamber of Deputies discuss the proposal in the general debate, and all its parts in the debate in detail, and that it discuss it by 16: 00 on Friday 5 November 2010. The draft budget committee was adopted when 130 of the 146 Members were voted in favour, 3 opposed. After a general and detailed debate, the Chamber of Deputies approved the bill (Resolution 117). 96 of the 144 Members present voted in favour, against 44.
101. On 3 November 2010, the bill was passed on to the Senate, which, at the request of the Government, discussed it in an abridged act. The Organising Committee of the same day was set up by the Committee for Economic, Agriculture and Transport. This committee discussed the draft law on 11 November 2010 and adopted Resolution 385 recommending its approval. The Senate discussed and approved the bill (Senate Press No. 365 / 0) on 12 November 2010 at its 25th session, when 42 of 76 Senators voted for it, 31 Senators opposed and 3 Senators abstained (Resolution No 603).
102. The bill was delivered on 19 November 2010 to the President of the Republic, who signed it on 26 November 2010. The approved law was then served for signature to the Prime Minister on 3 December 2010. The Act was published in the Collection of Laws under No. 348 / 2010 Coll. with effect from 1 January 2011.

IV./b

Constitutional conformity of the legislative procedure - general starting points
103. In view of the structure of the appellants' arguments, the Constitutional Court first examined the issues of competence and constitutional conformity of the legislative process in relation to the Chamber of Deputies. Since its competence to adopt the contested law within the meaning of Article 15 (1) of the Constitution had no doubt, it focused on the way the contested law was discussed and approved, against which the appellants also objected. In this respect, it considered it necessary to summarise the relevant constitutional bases on which it based its own review of the procedures in question.
104. The Constitutional Court has repeatedly stressed the need for respect for procedural rules and democratic principles in the legislative process in its present case-law. In its decision of 15 February 2007 sp. zn. They are thus primarily bound by the Constitution and the Rules of Procedure, as well as by the established practice of the parliamentary chamber and its institutions, which can be regarded as an unwritten part of the legislative procedure by means of a long-term repetition, if it can be found compatible with higher values of law making, democratic political system, etc. '(paragraph 38). This emphasis on the regularity (imputability) of the legislative process is not merely an appeal to the legislator to act as a public authority in its exercise in accordance with the law, but is an expression that the legislative regulation of the legislative process should also guarantee its compliance with constitutional order.
105. It is beyond doubt that the legislative procedure is already defined in the framework at constitutional order level, in particular as regards the competence and participation of individual public authorities in its exercise, the determination of the required majorities for taking decisions and the formal requirements of the law. However, these requirements do not only include the relatively specific procedural rules laid down by the Constitution, but also some constitutional principles, which only take place at the level of the law, i.e. the Rules of Procedure of the two chambers. This is primarily a democratic principle arising from Article 1 (1) of the Constitution, one of the essential elements of a democratic rule of law. This principle is not exhausted by the mere majority decision of democratically elected Members or Senators, but requires it also in relation to the way (s) in which the bill is discussed. In this respect, constitutional relevance can also be acknowledged to other principles, in particular the prohibition of indiscretions, the principle of the protection of minorities in the adoption of political decisions, the requirement of democratic control, both by Members and Senators and by the public, and finally, but not in the last instance, the principle of free competition of political forces (closer to these basic starting points in comparison to the finding of 1 March 2011 sp. zl. ÚS 55 / 10, parts V.A and V.B; 80 / 2011 Coll.).
106. In particular, the legislative procedure in both chambers of Parliament must enable the persons involved in the legislative procedure to "make a real assessment and discussion of the draft Parliament '(finding of 31 January 2008 sp. zl. ÚS 24 / 07, part X / a; N 26 / 48 SbNU 303; 88 / 2008 Coll.). Individual Members or Senators must have a real opportunity to become familiar with the content of the draft law and to give an opinion on it in the context of its deliberations in the relevant chamber of Parliament or in its institutions. The possibility of giving a public opinion on a draft law on parliamentary ground goes beyond the subjective right of a Member by its importance. It makes it possible, in relation to other Members and the public, to confront the reasons for the adoption or non-adoption of the draft law. Elected representatives of citizens must, in direct confrontation with the views of their opponents, publicly justify and defend the merits of their proposals. The decision is therefore taken only after the reasons for and against the adoption of the draft law have been formulated in this way. The individual Members and Senators, without prejudice to their ability to vote freely, to the best of their knowledge and conscience, will decide with the knowledge of both parties' arguments. At the same time, this allows the public not only to control their activities, that is to say to be able to know whether and for what reasons they have supported a proposal or not, but to participate indirectly in the legislative process, because the discussions within the general public, as well as the resulting consent or criticism, always affect the decision-making of individual Members and Senators.
107. The Constitutional Court considers the demands of openness, the public and the control of the legislative process to be an essential part of the democratic principle. At the same time, the possibility of confronting positions on parliamentary ground is a guarantee of the free competition of political forces, one of the fundamental components of a democratic state, which finds its express expression in Article 5 of the Constitution and Article 22 of the Charter. These constitutional principles only protect the possibility of parliamentary debate itself, not the possibility of having a real impact on the outcome of the final vote. This does not affect the principle of majority decision making. On the contrary, it can be pointed out that this is a real fulfilment of its inseparable component, which is the duty of the majority to ensure the protection of minorities in taking political decisions (Article 6 of the Constitution). In the case of the legislative procedure, this protection applies to the position of the parliamentary opposition (cf. sp. zn. Pl. ÚS 55 / 10, paragraph 70). In this context, the Constitutional Court recalls that "Parliament also reflects the idea of pluralism, which is the basis and character of any free society. In the parliamentary debate and, naturally, in the work of the individual committees of Parliament, the opposition is taking the floor, which, at the same time, implements a control that can be seen as one of the fundamental features of the rule of law. Often only in Parliament are they given the opportunity to express so-called weak interests, i.e. those of social groups that do not have such capacity to assert themselves. It is these characteristics of parliamentary debates that show Parliament's particular role in balancing and in integrating interests. All these principles need to be taken into account when adjusting and implementing the procedure relating to draft laws" (sp. zn.
108. Finally, the real possibility of fulfilling the parliamentary procedure from the point of view of constitutional principles presupposes "the creation of sufficient time for parliamentary discussion of a legal draft" (sp. zn. At the same time, the timescale of the parliamentary procedure is a prerequisite for the parliamentary debate to be able to fulfil its legitimacy function in general. It is therefore necessary to allow stakeholders, in particular representatives of the parliamentary opposition, sufficient time to discuss the draft laws so that they can be truly acquainted with them, assess them and take a qualified position on them, which they can then present in a parliamentary debate or in the proceedings of committees or other bodies, as appropriate. As the Constitutional Court further pointed out, precisely in the defined time and procedural framework for the negotiation of the law "the protection of constitutional guarantees of the real functioning of parliamentary" (sp. zn. In relation to this requirement, too, the broader importance of parliamentary debate in relation to the possibility of the public being familiar with the legislative proposal and its reasons cannot be ignored, formulating its opinions on it and thus influencing its very course and decision-making by individual legislators. Restricting the legislative process for only a few days would effectively exclude such an option.
109. Guaranteed those principles at the level of simple law is one of the functions of the Rules of Procedure of both chambers. These are intended to establish general rules for the negotiation of legal proposals, which may include effective mechanisms such as those which a parliamentary majority may, on the one hand, prevent the impossibility of adopting a majority decision on grounds of obstruction of the parliamentary opposition, but which at the same time allow the parliamentary opposition to protect its rights against major constraints by the majority (cf. sp. zn. Pl. ÚS 55 / 10, paragraph 73). Nor is the possibility, in justified cases, that a special procedure will be allowed for the consideration of the draft law, which would significantly affect the above constitutional principles, allowed by the Rules of Procedure. In this case, however, the purpose of such a procedure must justify its limitation.

IV./c

Constitutional criteria for the declaration of a state of legislative emergency and the discussion of a draft law in the abbreviated procedure under Rule 99 of the Rules of Procedure of the Chamber of Deputies
110. The appellants find that the procedure for adopting the contested law is inconsistent in that it has been dealt with in an abridged procedure in a state of legislative emergency without giving legal reasons for its publication. In exceptional circumstances, that legal institute allows the debate of government bills to be speeded up in abridged negotiations. The content or purpose of the Institute shall be to prevent irreversible or difficult to reparable damage to the fundamental interests of the members of the company or to prevent real material damage to the property (existing or expected) of the State.
111. The Rules of Procedure of the Chamber of Deputies in Section 99 (1) of the Chamber of Deputies make it possible "to declare a state of legislative emergency in exceptional circumstances where fundamental rights and freedoms of citizens are significantly threatened or where the State is in danger of significant economic damage '. This situation is declared by the President of the Chamber of Deputies, who, at the request of the Government, is also entitled to decide that a government bill will be dealt with in an abridged manner (Section 99 (2) of the Rules of Procedure). In such a case, it shall order the proposal to one of the committees and shall fix an inexcusable time limit for its decision. Before discussing the agenda, the Chamber of Deputies will assess by its resolution whether the state of legislative emergency is still in place. Before discussing a specific government bill, it is, in turn, obliged to assess whether the conditions for its discussion are in the abridged negotiations. If it concludes that these conditions are given, it shall discuss the draft law directly at second reading, with the right to decide to abandon the general debate and to limit the speaking time to five minutes and, on a proposal from the committee responsible, to limit the detailed debate to only certain parts of the law. The third reading of the bill may take place immediately thereafter. The procedure for the adoption of the draft law itself in the context of the declared state of legislative emergency is then detailed in § 99 (3) to (9) of the Rules of Procedure.
112. It is clear from this that the discussion of the draft law in the abridged negotiations differs significantly from the normal course of the legislative process, as it usually takes place within a few days for a significant limitation of the rights of individual legislative actors. These restrictions also significantly affect the above constitutional principles affecting the legislative process, including the rights of the parliamentary opposition, and to a significant extent relate to the fundamental functions of the parliamentary debate (cf. In this context, it should be recalled that the Constitutional Court, in its findings sp. zn. In the first of these findings, he noted that "the decision on whether there is a threat of economic damage is not a decision on damage in the legal sense, but is based on considerations on broader political consequences' (paragraph 17), recognising both the relevance and the fact that a significant majority of Members expressed themselves to confirm the state of legislative emergency (paragraph 18). At that legal conclusion, the Constitutional Court also established the latter finding, in which it stressed the government's responsibility for assessing the threat of any serious consequences for fundamental rights and freedoms, state security or property value." [L] to assume that it is the government, having regard to its scope and scope of competence, that is the most appropriate authority to be able to assess the seriousness of certain circumstances in a sufficient manner and in a relatively short period, even in the case of a limited extent of information, and to assess on the basis of it the rationale of the urgent discussion of a draft law in a state of legislative emergency. 'At the same time, the question of the duration of the state of legislative emergency and the discussion of the government bill in the abbreviated procedure is fully in the hands of the Chamber of Deputies, which, by voting in such a way as to prevent the draft (paragraph 78 of the cited finding).
113. However, the discretion of the Government and the Chamber of Deputies associated with determining how the draft law is to be dealt with is not impeccable, but its limits stem from the constitutional function of the legislative procedure, including the requirement for sufficient time and proper consideration of the draft law while respecting the rights of the parliamentary opposition. The role of the Rules of Procedure in this regard is to lay down general rules on the legislative process, including, where appropriate, exceptions, which, while significantly limiting the constitutional principles relating to the legislative process, but with the existence of a legitimate and constitutional and verifiable reason. Such an exception is even provided for directly at the level of constitutional order when Article 8 of Constitutional Act No. 110 / 1998 Coll., on the security of the Czech Republic, provides for the possibility to discuss a government bill in a shortened act, at a time of state or state of war threat. In view of the constitutional nature of this restriction, as well as the sense of constitutional legal regression of the abbreviated procedure, which is the protection of the rights and principles governing the legislative process in a democratic legal state, the definition of further cases of shortened procedure at the level of the law (Rules of Procedure) may be allowed only if the broad consensus in Parliament or (a) is consistent with the type of seriousness of situations in which the procedure is shortened, the gravity of situations envisaged by the constitutional order for the abbreviation of draft laws (cf.
114. The negotiation of a draft law in a short act in a state of legislative emergency constitutes a legal exception to a proper legislative procedure, the rationale of which is based not on consensus between Members across the political spectrum, but on the gravity of a situation which, in the view of the Government, needs to be responded immediately by adopting a law or amending it. Paragraph 99 (1) of the Rules of Procedure, by defining the grounds for declaring a state of legislative emergency, did not limit the application of this procedure to certain specific circumstances (as is the case with Article 8 of the Law on Security of the Czech Republic), but determined the intensity of its gravity. The shortfall is thus conditional on the existence of exceptional circumstances and the intensity of possible negative consequences to one of the generally defined values - the rights and freedoms of citizens, the security of the state or the protection of property.
115. An exceptional circumstance within the meaning of the above provision can only be considered to be such a circumstance that is clearly out of the ordinary course of the political processes internal and external, or that it may be a circumstance such as natural disasters (the finding of page 5 of ÚS 55 / 10, paragraph 84). The rationale for declaring a state of legislative emergency must be assessed in the light of the decision-making period and the extent of the information available at that time. It is also necessary to measure the intensity of the reasons for the state of legislative emergency in relation to the limitations of the constitutional principles in question, as the interest in preventing or eliminating its consequences should, in particular, outweigh the interest in the proper conduct of the legislative procedure, taking into account the protected values under Rule 99 (1) of the Rules of Procedure. It must be clear what specific consequences the Government considers are for the values defined in this provision, that is to say, what justifies the conclusion on the threat of significant economic damage or a threat to fundamental rights and freedoms or to the security of the State. These reasons must not be arbitrary, and the specific draft law, which the government proposes in the short-term procedure, must be able to avoid the existence or duration of the threat to the public interest in question (Case 55 / 10 ÚS [10] ECR II. In this context, the Constitutional Court points out that its role is not to be an instance of appeal in relation to the rationale of the institute for declaring a legislative emergency, but to protect the constitutional principles relating to the legislative process from possible abuse of the institute to circumvent the proper legislative procedure.
116. This is only a fundamental definition of how the legislative emergency institute is generally reflected in constitutional principles, in which context the Constitutional Court refers in full to the legal conclusions contained in the sp. zn. Pl. ÚS 55 / 10, part V.C).

IV./d

Review of the constitutionality of the contested law in a state of legislative emergency
117. The Constitutional Court has taken the view that the declaration of a legislative emergency was justified in which the contested draft law was discussed. As already mentioned, Decision No 7 of the President of the Chamber of Deputies of 29 October 2010, as well as Government Resolution No 759 of 26 October 2010, justify the declaration of a state of legislative emergency briefly "threat of significant economic damage '. Further justification for the declaration of a state of legislative emergency can be drawn from Prime Minister Petr Netime's observations at the 7th meeting of the Chamber of Deputies on 27 October 2010 and its 8th meeting on 2 November 2010 (they are also further elaborated in the recap of the Prime Minister's observations of 27 January 2011 in the sp. zl. ÚS 55 / 10, paragraphs 43 and 44). It follows from those observations that the reason for the declaration of a state of legislative emergency was the necessity of adopting all the government bills in question by the end of the year, as the draft State Budget Act for 2011 assumed that those laws would become effective on 1 January 2011. The threat of significant economic damage to the State should therefore be that the State budget would be based on a non-existent legal situation, which would result in a deepening of the public deficit. This would also have an impact on the assessment of the credibility of the Czech Republic in the financial markets, which would have resulted in a reduction in the rating and in the price of the debt service. The exceptional circumstances were observed with regard to the alleged" obstruction' by the parliamentary opposition, which, in a situation where it was not possible to discuss all the draft government laws in question by a normal procedure in order to take effect at the latest by the end of the year, did not allow them to be discussed promptly at first reading (Section 90 (2) of the Rules of Procedure) or at the time of shortening of the deadline for hearing them in the relevant committees to 15 days (Section 91 (2) of the Rules of Procedure). It follows from his observations that it was in the aforementioned "obstruction" of the parliamentary opposition that the government saw a central reason for which it had to withdraw the original bills and adopt resolutions proposing their renegotiation in a state of legislative emergency in a shortfall.
118. On the facts concerning the assessment of the veracity of the state of the legislative emergency under which the contested law was discussed, the Constitutional Court stated in the judgment in paragraph 55 / 10 (part VI). In the present case, it considered the constitutionality of the procedure for adopting Act No. 347 / 2010 Coll., amending certain laws in connection with austerity measures under the jurisdiction of the Ministry of Labour and Social Affairs, namely one of the four laws discussed in the abbreviated act in a state of legislative emergency, as declared by the President of the Chamber of Deputies No 7 of 29 October 2010. The legal conclusions contained in this finding in relation to the assessment of the rationality of the declaration of a legislative emergency, as well as the subsequent constitutionality of the infringement of Article 99 (1) of the Rules of Procedure, apply in full to the case as it is the same state of legislative emergency. Nor does it change the fact that, contrary to the case at hand, a general debate was held in the case of a draft of the contested law in the abridged negotiations, since that fact does not change the substance of the limitation of the proper legislative procedure. For these reasons, the Constitutional Court refers in full to this reasoning and, in this part, it is limited to its summary or to its additions in view of certain specific legislative processes relating to the contested law.
119. The contested law was dealt with by the Chamber of Deputies in an abridged act in a state of legislative emergency, without giving the reasons set out in paragraph 1 of this Article. The contested law was adopted by this procedure in response to the opposition's opposition's disagreement with speeding up the consideration of government bills, the adoption of which, by 31 December 2010, was envisaged by the government's draft state budget, in a situation where, in view of the standard legislative period (including the supposed failure to approve the bill in the Senate), it could be assumed that it would not be adopted in time. This was justified by the very standard political situation in which the opposition used the procedural means laid down in the Rules of Procedure to assert its dissenting position on government bills by which the majority of governments upheld their political priorities.
120. In the opinion of the Constitutional Court, the application of the opposition's objections pursuant to Articles 90 (2) and 91 (2) of the Rules of Procedure to a draft of the contested law, which merely aimed at complying with the proper legislative procedure for the consideration of the draft law, cannot be regarded as an exceptional circumstance within the meaning of Article 99 (1) of the Rules of Procedure. The two provisions are an expression of the protection of the rights of the parliamentary opposition (minorities), in this case the protection against fundamental restrictions on the structure and duration of the legislative procedure, since the legislation allows such a reduction only for the approval of a significant majority of Members exceeding three quarters of their total number. It was therefore the use of the right conferred by the Rules of Procedure of the Chamber of Deputies on a qualified minority of Members to protect their rights (sp. zn.
121. That opposition procedure cannot be regarded as an exceptional circumstance even in the context of the fact that the draft State Budget Act for 2011, submitted by the Government to the Chamber of Deputies at the same time as the original draft laws, provided for the adoption by the end of 2010 at the latest in terms of the structure of its revenue and expenditure. The State Budget Act is undoubtedly of fundamental political importance as it sets out, in particular, the structure of the State Budget expenditure in a binding manner, thereby allowing the government to implement its political priorities through the reallocation of revenue from the State Budget (cf. the finding of 12 February 2002 sp. zl. ÚS 21 / 01, N 14 / 25 SbNU 97; 95 / 2002 Coll.). However, the implementation of these priorities cannot be carried out only at the level of the State budget, but must take place from the point of view of the legislation setting out its revenue and mandatorial expenditure, i.e. through amendments to specific laws allowing the required changes to be made to the revenue or expenditure side of the State budget. It is the responsibility of each government to base its draft State Budget Act on the legislation in force and, if it considers it appropriate to achieve its amendment, to implement in due time its authority to submit an appropriate bill through which it would achieve the required changes. Even if such a delay would result in the non-adoption of the State Budget Act before the first day of the financial year, it would not in itself be an exceptional circumstance, as the consequences of this situation are foreseen by the legislation of the budget provision within the meaning of Article 9 of Act No. 218 / 2000 Coll., on budgetary rules and on amending certain related laws (budgetary rules), as amended. It is therefore a regular process of adopting the state budget and a standard way of enforcing the government's budgetary policy through relevant legislative changes (sp. zn. Pl. ÚS 55 / 10, paragraphs 92, 93 and 94).
122. Acceptance of the veracity of the declaration of a legislative emergency in these circumstances could have unprecedented consequences in the future, where it could be practically possible at any time to limit (or even exclude) parliamentary debate in a fundamental way and thus prevent the consideration of draft laws in a proper legislative procedure, only with reference to the fact that the draft State Budget Act foresees and is bound by the adoption of these legal standards for the next year. In fact, almost every draft law is reflected in the revenue or expenditure of the state budget, so such a procedure would make it impossible for the parliamentary opposition to comment on the draft laws and would make it entirely dependent on the will of the parliamentary majority (page 55 / 10, paragraph 94). The Constitutional Court also does not agree that, as a sufficient reason to limit the constitutional principles relating to the legislative process, only (reference to) the general and hypothetical risk, without any specific data, could be considered as sufficient to ensure that the potential non-adoption of the draft law could have a negative impact on the assessment of the Czech Republic by the credit rating agencies, or a negative reaction by the financial markets, even if it itself does not call into question the importance of these factors for the state of public finances, as well as the possibility of the Czech Republic to promote its interests and the interests of its citizens (point of point Pl.
123. The declaration of a state of legislative emergency and the discussion of the draft law in the abbreviated negotiations fundamentally changes the structure of the legislative process and limits its substance to the consent or opposition itself. This procedure can only be accepted as an exception to the rule, provided that there are particularly serious reasons (see above) where the interest in the immediate adoption of the law in the context of specific circumstances outweighs the general requirements arising from constitutional order in relation to the legislative process. As has already been pointed out, the body primarily responsible for assessing whether this is a situation is the government, and then the Chamber of Deputies, not the Constitutional Court. However, it cannot be accepted to use this extraordinary institute as a common tool to restrict legislative procedures by a parliamentary majority whenever the opposition objects to the draft law and, in order to prevent or delay its adoption, makes use of the provisions of the Rules of Procedure.
124. If the legislative procedure is not only to fulfil the voting function, but also to guarantee free political competition, any demand for rationalisation (in relation to the negative consequences of possible obstruction by the parliamentary minority) cannot be made by promoting a state of legislative emergency by the government and its associated parliamentary majority. In a situation where the government was unable to articulate a reason other than opposition to government bills, or the necessity of adopting laws before the beginning of the financial year, because the draft state budget is already being put forward, it would actually mean admitting proper legislative procedures, including its individual stages, to the mere importance of the facade of parliaments, which has no meaning and which can be limited at any time when, in view of its timing, it seems to be most superfluous. However, such a concept of a legislative procedure, as has already been mentioned above (Part IV / b), is fundamentally not identified by the Constitutional Court and is understood by the proper legislative procedure as a guarantee of free political competition and within it also the rights of the political opposition.
125. The Constitutional Court therefore also concluded in this case that, in the case under consideration, no legitimate and constitutionally enforceable reason was given to declare a state of legislative emergency under paragraph 99 (1) of the Rules of Procedure, which is why all the decisions of the authorities of the Chamber of Deputies on the proposal of the Government, as well as the decision itself on the duration of the state of legislative emergency and on the duration of the conditions for the negotiation of the contested law in the abbreviated proceedings, were made in contravention of the above-mentioned aspects characterising the constitutional democratic principle. The contested law was therefore adopted in accordance with a procedure contrary to Articles 1 (1), 5 and 6 of the Constitution and Article 22 of the Charter.
126. In addition to that, the Constitutional Court considers it necessary to comment on the question of calling an extraordinary meeting to discuss four draft laws, including the contested law. This call took place in such a time pressure that not only the opposition, but even the government Members were not really able to check even the identity of the draft with the previous draft government bill, let alone get to know its content in detail and assess its possible impact (cf. The Constitutional Court points out, on the basis of the constitutional bases already mentioned, that the time difference between the assembly and the holding of the parliamentary chamber meeting is intended to enable Members to participate in this meeting and to familiarise themselves with its content and items. However, the assessment of whether this was the case is not only a question of an abstract timing but also depends on the assessment of the circumstances in which the meeting was convened. In the present case, an extraordinary meeting was convened during another proper meeting, namely on the points - draft laws with which Members were informed at the previous meeting. It can be concluded that, in the present case, the question of the acceptability of bringing an extraordinary meeting to four bills cannot be considered in isolation from the justification of the declared state of legislative emergency. If it were justified, it would be logical to discuss it in the second and third reading within a few days. In the present case, therefore, the above reasons for the unconstitutionality of the contested law are affected in a state of legislative emergency. However, the procedure of the President of the Chamber of Deputies, who has called the meeting in question in such a short time without being judged by the Constitutional Court in general in terms of constitutionality, can undoubtedly be described as an undesirable procedure, which should only take place exceptionally and for serious reasons.

V.

Deferred enforceability
127. The Constitutional Court, in its finding sp. zn. Pl. ÚS 55 / 10, distinguished the fundamental defects of the legislative process, which at all led to the failure to fulfil the constitutional conditions for the adoption of a law (e.g. because of the absence of the consent of one of the chambers), and the defects relating only to the constitutional rules guaranteed by the rights of individual legislative actors whose use is fully in their possession (paragraph 103 of the decision). In the latter case, it is also necessary to assess the time gap between the adoption of the law and the submission of a motion for its annulment, which may lead to the recovery of the breach of constitutional order or the disappearance of the derogatory ground (paragraphs 104 and 105 of the decision).
128. As in the case of the above-mentioned finding, a group of Members also submitted a proposal for the annulment of the contested law immediately after its publication in the Collection of Laws, alleging relevant objections to the course of the legislative procedure. There was therefore a reason for the Constitutional Court to proceed with its annulment. However, the Constitutional Court also concluded in the present case that there is a substantial reason for the postponement of the enforceability of the finding, consisting of the negative consequences of the repeal of this law on the State budget. It understands this in the context of all the laws approved and discussed in the context of the legislative emergency. The Constitutional Court had therefore to consider, in view of the material objections raised, whether maintaining the law would at the same time not lead to the exposure of the addressees of the contested law to the possible (alleged) unconstitutional consequences of the contested law by 31 December 2011. As a result of the procedure of the Constitutional Court, in such a case, the contested provisions would remain in force, albeit temporarily, without the examination of objections relating to their content.
129. The Constitutional Court therefore had no choice but to examine, in addition to the fact found, the other arguments of the appellants which could justify the annulment of the law without delaying its enforceability. For this reason, the Constitutional Court continued to review the contested law, assessing both the remaining question of the competence and constitutionality of the legislative procedure in relation to the Senate and the appellants' substantive objections to the contested law.

VI.

Assessment of the competence of the Senate with regard to the objection of refusal to vote to Senators
130. As in the case of the Chamber of Deputies, there is no doubt in the Senate's competence to adopt the contested law within the meaning of Article 15 (1) of the Constitution. However, in view of the appellants' arguments, the Constitutional Court had to deal with the objection concerning the refusal to vote to the Senators elected in the October 2010 elections. That would mean that the Senate decided on the draft law in the wrong composition, which would result in the bill not being discussed and approved by the competent authority on 12 November 2010.
131. In relation to the question of whether the Senate discussed and approved the contested law in the correct composition, the Constitutional Court found that, in addition to the Senators whose term of office was based on the Senate elections held in 2006 and 2008, the mandate of the Senators elected in the 2004 elections, which took place on 12 and 13 November 2004, was maintained on 12 November 2010. At the same time, however, the mandate of the Senators elected in the October 2010 elections has already lasted.
132. Having regard to the fact that the election of a third of the Senators under Article 17 (1) The Constitution can take place already 30 days before the end of the term of office, there is basically always a situation after the elections where, for a certain period of time, the mandates of both the newly elected senators and the senators elected in the previous ordinary elections, which have not yet passed the six-year term. The reason for this situation, where up to 108 senators may simultaneously last for a period not exceeding 30 days, is that, although under Article 19 of the Constitution a senator's mandate is to be elected, the Constitution also does not link the termination of the senate's mandate for a specific constituency. However, this situation does not mean that, even temporarily, the number of members of the Senate would increase or that there would even be two Chambers with the same legislative competence for some time. It is necessary to distinguish between the number of senators who hold their mandate during a certain period and the composition in which the Senate meets during that period. This distinction, which also applies to the Chamber of Deputies, is of fundamental importance in terms of the objections raised.
133. The Constitution sets out the term of the legislators and the time of the meeting of the relevant chamber in a different way. In the case of the Chamber of Deputies, the (second) election date shall be considered as the four-year term. The term of office of all Members shall then expire within the meaning of Article 25 (b) of the Constitution. However, the time of the session of the Chamber of Deputies does not count with the election, as this is only the decision of the President of the Republic to convene it pursuant to Article 62 (b) of the Constitution. He is obliged to convene it not later than the 30th day following the election date, and if he does not, the Chamber of Deputies shall meet in accordance with Rule 34 (1) of the Constitution on that very day. From that date, its sitting shall also continue. The end of the session of the Chamber of Deputies then provides for Rule 34 (4) The Constitution by taking place by the expiry of its term of office or by its dissolution.
134. Unlike Members, for Senators, their term of office depends on the election of the relevant third senators within the meaning of the second Constitution, Article 16 (2). The session of the Senate shall be permanent as from the date on which it is convened pursuant to Article 107 (2) of the Constitution. It can be concluded that, in view of the adjustment of the reasons for the termination of the mandate, the Constitution recognises the short-term duration of both the mandates which are in service and the newly elected Members or Senators. However, this does not affect the fixed number of members of Parliament's chambers under Article 16 of the Constitution. The Chamber of Deputies or the Senate always sits in this fixed number, only in a single composition, and only in that composition can they exercise their competence. Thus, if the constituency did not tie the end of the parliamentary term and, in the case of the Chamber of Deputies, the end of its sitting, to the date of the new elections, it did not limit the possibility of exercising the powers of both chambers of Parliament in their current composition for the period defined by this extension to the new parliamentary term.
135. In the case of the Chamber of Deputies, this means that, since its sitting is not until the end of its term of office, it is entitled to exercise its competence in its current composition until the end of its session. The possible holding of elections to the Chamber of Deputies, and as a result of the creation of mandates for new Members, has no constitutional effect on this in itself. It follows from Article 34 (4) of the Constitution and from contrario that the President's decision to convene is not the reason for the end of the sitting of the House of Deputies, and therefore the newly elected Chamber of Deputies may be convened at its meeting only after its end.
136. A different solution in some way applies in relation to the Senate, since in its case there is a partial replacement of the composition during its permanent meeting. The lack of explicit constitutional regulation will replace, in the case of the Senate, the legislation contained in its Rules of Procedure, which, when the Senate meets in what composition, is essentially based on the same bases as the House of Deputies. The composition in which the Senate is sitting is therefore defined within the meaning of Articles 24 and 26 (1) of the Senate's Rules of Procedure by its term of office.
137. The Senate shall meet in a varied composition since its first meeting (Sections 24 (2) and 26 of the Senate Rules of Procedure), which shall also begin its term of office (cf. Resolution of 1 March 2011 sp. zn. Until that date, his current term of office is in place and therefore he is in his current composition, which does not affect the duration of the mandate of the senators. In fact, irrespective of the date of the first meeting, the mandate shall cease to exist at the end of their term of office within the meaning of Article 25 (b) of the Constitution.
138. The Constitutional Court found that the contested law was adopted on 12 November 2010 at the 25th meeting of the Senate in its seventh term of office, which was discussed and approved by the necessary majority (Senate Document No 365 / 1, Order No 603). The Senate meeting in composition, whose third mandate was created by the election of a third of the Senators in November 2004. On 12 November 2010, all senators who took part in the vote on the bill insisted on their mandate as Senator.
139. At the same time, it is clear from the above that at the time the draft law was discussed, the Senators elected in the October 2010 elections were not part of the composition in which the Senate, within the meaning of Articles 16 (2) and 34 (1) of the Constitution, met. Therefore, their voting rights could not be denied either. The Constitutional Court therefore did not find the lack of competence of the body which issued the contested law and therefore took the view of the objections relating to the content of the contested law.

VII.

Assessment of the constitutional conformity of the reduction of State aid for contracts concluded before the contested law became effective
140. Having regard to the structure of the appellants' objections and the content of the contested law, or an alternative petition as defined by the amending provisions, the Constitutional Court divided the subject matter of its review into two main parts. First of all, the question of the constitutionality of the reduction in the amount of State aid for contracts concluded before the contested law became effective (Article II of the contested law). The second part represents an assessment of the constitutionality of a one-off State aid tax which was entitled in 2010 and which was pointed out by the construction savings bank after 31 December 2010 (amendment of the Income Tax Act of Article III of the contested law). Thus, the Constitutional Court first considered the first of these issues.

VII./a

Derogation of the contested provision of Article II of Law No 348 / 2010 Coll.
Zobrazit všechna ustanovení (293)

Sign in for notes, favorites and notifications

Register Free Sign In
Rating:

Comments 0

To write comments, please sign in.

Regulation Information

CitationThe Constitutional Court found No. 119 / 2011 Coll., on the application for annulment of Act No. 348 / 2010 Coll., amending Act No. 96 / 1993 Coll., on Construction Savings and State Support of Construction Savings and on the Addition of Act No. 586 / 1992 Coll., on Income Taxes, as amended by Act No. 35 / 1993 Coll., as amended, and Act No. 586 / 1992 Coll., on Income Taxes, as amended
Regulation Type-
Author-
CollectionCode of Laws
Date of Promulgation06.05.2011
Effective from-
Effective until-
Status Valid
The regulation text is for informational purposes only.

Partner Websites

Založení s.r.o. Virtual offices and company formation
MojeDatovka.cz Data box database and search
ČeskéFirmy.online Czech company directory and reviews
Favorites
Browsing History
This website uses cookies to ensure proper functionality, analyze traffic and display advertising. More information
Cookie Settings

Choose which cookie categories you want to allow.