Abstract

Financing through Charges in a Competitive Framework – The Problems of Refinancing and of Legitimation in German Charge Law

Charges as a financing instrument for individual public services are traditionally directed at the notion of a monopolistic service provider without the risks of use or financing. This powerful position is enhanced by an obligatory connection to and the use of main services, a statutory guarantee regarding the recuperation of costs, and the official control of duties and taxes. To limit this official control of duties and taxes, the law relating to charges formulates extensive limitations regarding the calculation of charge rates that seek to reconcile the interests of the service provider (the need to refinance) and those of the debtor (the protection of rights and legal claims), and thus also serves as a source of legitimacy. In practice, services often have to be provided under competitive conditions which renders the fulfillment of the statutory guarantee to recuperate costs impossible. Consequently, the legitimation of the protection regulations for the charge debtor becomes fragile. This article illustrates generally as well as specifically on the basis of communal public services at burial sites and the collection of road charges according to the German Road Construction Private Financing Act (FStr-PrivFinG) the competitive framework of services rendered as well as the legal limitations regarding the tolerance in ascertaining the remuneration. In particular the transfer of the strict protection measures from the law relating to charges (which should limit the legislation of an obligatory refinancing for an investment in a monopoly that is practically without risk) to private economic investment projects hardly seems feasible. A further substantive development of the law relating to charges, which is driven by case law also and in particular with respect to financing, is therefore necessary. In individual fields legal policy must consider relinquishing charges in favour of a special law on price control.