Some aspects regarding insolvency of administrative-territorial units from the perspective of law No. 273/2006 and government emergency ordinance No. 46/2013

Author:Emilia Lucia Catana
Position:Associate Professor at the 'Dimitrie Cantemir' University of Târgu-Mures; Lawyer-Mures Bar
Pages:1-13
SUMMARY

The presumption that administrative-territorial units as legal persons under public law are always solvent, proves not to hold true for periods such as the economic crisis that Romanian society goes through, which produces negative repercussions not only in the activity of private entrepreneurs but also on local budgets. In this context, the study makes an analysis of the regulatory framework established by Law no. 273/2006 on local public finance in the field of financial crisis and insolvency matters of administrative-territorial units, with consequent modifications and additions, and by Government Emergency Ordinance no. 46/2013 on financial crisis and insolvency of administrative-territorial units, respectively.

 
CONTENT
1
SOME ASPECTS REGARDING INSOLVENCY OF ADMINISTRATIVE-
TERRITORIAL UNITS FROM THE PERSPECTIVE OF LAW NO.
273/2006 AND GOVERNMENT EMERGENCY ORDINANCE NO. 46/2013
Emilia Lucia Ctan, PhD*)
Abstract
The presumption that administrative-territorial units as legal persons under public
law are always solvent, proves not to hold true for periods such as the economic crisis
that Romanian society goes through, which produces negative repercussions not only
in the activity of private entrepreneurs but also on local budgets.
In this context, the study makes an analysis of the regulatory framework
established by Law no. 273/2006 on local public finance in the field of financial crisis
and insolvency matters of administrative-territorial units, with consequent
modifications and additions, and by Government Emergency Ordinance no. 46/2013
on financial crisis and insolvency of administrative-territorial units, respectively.
Keywords: private law; administrative-territorial units; insolvency; financial
crisis; financial recovery
1. Introductory Considerations
Litigation where administrative-territorial units are made to pay certain
amounts of money as a result of failure to fulfill or of defective fulfillment of
contractual obligations, no longer represent novelty in the Romanian
administrative and legal landscape. Legal practice demonstrates that the
administrative-territorial legal status is far from representing a circumstance that
would qualify administrative-territorial units as being privileged in litigations they
are part of, and consequently these have to pay compensation, default fees or
comminatory damages as any other private entity.
The current economic crisis worsens the issue of debts accumulated by
administrative-territorial units, which can determine legal incapacity of payment,
and determines us to approach an issue that becomes every day a more and more
tangible reality: can administrative-territorial units be declared insolvent?
A possible answer to this question implies, first of all research into the specific
legal framework (if this exists and is currently applicable), and secondly, research
on the consequences that the insolvency procedure has upon administrative-
territorial units from the perspective of their legal status and legal competences.
In a synthetic presentation, the legal framework regarding administrative-
territorial units is represented by the Law of local public administration no.
*) Associate Professor at the ”Dimitrie Cantemir” University of Târgu-Mureş; Lawyer – Mureş
Bar; e-mail: luciacatana@yahoo.fr.
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215/2001, that was republished, modified and added to1), which provides that both
communes and cities, municipalities and counties are administrative-territorial
units where local autonomy is exercised and public administration local
authorities are organized and carry out their function.
Administrative-territorial units are public law legal entities2), and possess the
following characteristics:
– they have full legal capacity and their own patrimony3);
– are legal subjects of fiscal law, own company registration code and
accounts created at the local treasury and banks;
– have rights and obligations that result from agreements regarding
administration of public and private domain goods or from other legal
relationships with private individuals or legal entities;
– in court, they are represented by the Mayor, or depending on the case, by
the President of the Local Council.
Firstly, it needs to be mentioned that the local public administration authorities
that are organized and function in administrative-territorial units (communes, cities,
municipalities, and counties) are, as follows: communal, city, and municipality local
councils as deliberative authorities, and Mayors and local councils presidents as
executive authorities. Their mission is to achieve local autonomy in administrative-
territorial units, that is, to solve public issues in communes and cities4).
1) Law of local public administration no. 215/2001, published in the “Official Gazette of
Romania”, Part I, no. 204 of 23 April 2001, republished in the Official Gazette of Romania, Part I,
no. 123 of 20 February 2007, with consequent modifications and additions.
2) See art. 21 of Law no. 215/2001, republished, with consequent modifications and additions;
we also mention the provisions of the new Civil Code, art. 189 which provides that ”Legal entities
can belong to Public or Private Law”, and details of this legal provisions are to be found in Title
IV of the new Civil Code.
3) To this purpose, see art. 5 paragraph 1 of Government Ordinance no. 53/2002 on the
Framework-status of administrative-territorial unit, published in the “Official Gazette of Romania”, Part
I, no. 633 of 27 August 2002; Government Ordinance no. 53/2002 was endorsed with modifications
and additions through Law no. 96/2003, published in the “Official Gazette of Romania” Part I, no. 195
of 26 march 2003; we also consider relevant provisions of art. 31 of the new Civil Code, which
provides as general norm that ”Any private individual or legal entity owns a certain patrimony”.
4) For details regarding local autonomy as a principle of organization and functioning of local
public administration, see A. Iorgovan, Tratat de drept administrativ, volume 1, 4th edition, All Beck
Publishing House, Bucharest, 2005, pp. 770-782; V. Vedinaş, Drept ad ministrativ, 7th edition, revised
and updated, Universul Juridic Publishing House, Bucharest, 2012, pp. 425-429; R.N. Petrescu, Drept
administrativ, Hamangiu Publishing House, Bucharest, 2009, p. 56; I. Nedelcu, Drept administra tiv şi
elemente de ştiina administraiei, Universul Juridic Publishing House, Bucharest, 2009, pp. 260-261;
B. Vasilescu, Drept administrativ, Bachelor’s degree course, 2nd edition, Universul Juridic Publishing
House, Bucharest, 2011, pp. 245-249; M. Voican, Principiile cadru ale administraiei publice locale,
Universul Juridic Publishing House, Bucharest, 2008, pp. 50-83.
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2. Normative acknowledgement of financial crisis and insolvency
situations of administrative-territorial units, by Law no. 273/2006 on local
public finance and Government Emergency Ordinance no. 46/2013.
Procedure and applicability
According to provisions of art. 2 pt. 38 of Law no. 273/2006 on local public
finance5), insolvency represents the incapacity of an administrative-territorial unit
to fulfill its outstanding liabilities, except for those in contractual litigation.
It should be noted that the law allots an entire chapter to insolvency of
administrative-territorial units (Chapter 6), and to another situation that is
regulated by law for the first time, that of financial crisis of administrative-
territorial units, which, according to the law proceeds insolvency.
Concretely, art. 74 paragraph 1 of the law as modified by Government
Emergency Ordinance no. 46/20136), provides that the administrative-territorial
unit is considered to be in financial crisis if it is in one of the following situations:
a) failure to fulfill legally enforceable payment obligations, past due 90 days, which
represent over 15% of the general budget of the respective territorial-administrative
unit, with the exception of debts that are subject to commercial litigation;
b) failure to pay salary rights provided in the income and expenditure local
budget or in the budgets of institutions or public services of local or county
interest, for over 90 days past due date;
From a procedural point of view the financial crisis situation are intimated by:
– the main credit release authority of the administrative-territorial unit,
– the head of the finance-accounting department of the internal apparatus of
the administrative-territorial unit,
– secondary and tertiary credit release authorities within the public services
subordinated to the local council,
– managers of private companies or of state-owned companies that are
subordinated to the local council
– different creditors,
– the head of County Public Finance Directorate, respectively of Bucharest
Public Finance Directorate,
– territorial bodies of the Court of Accounts.
The intimation is addressed to:
County Public Finance Directorate, or Bucharest Public Finance Directorate
the main credit release authority of the administrative-territorial unit in
financial crisis the main credit release authority of the administrative-territorial unit.
5) Law no. 273/2006 on local public finance, published in the “Official Gazette of Romania”,
Part I, no. 618 of 18 july 2006, with consequent modifications and additions.
6) Government Emergency Ordinance no. 46/2013 on financial crisis and administrative-
territorial units, published in the “Official Gazette of Romania”, Part I, no. 299 of 24 May 2013.
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Within 30 days from the application filed by any interested person, the main
credit release authority of the administrative-territorial unit has the obligation to
provide the economic-financial situation and conclude whether the administrative-
territorial unit is in one of the legal situations of financial crisis.
The main credit release authority of the administrative-territorial unit (Mayor,
president of the county Council), from the office or after the intimation of
financial crisis was filed, has to summon the deliberative authority (local council,
county council) the General Directorate of Public finance within 5 working days7).
The deliberative authority becomes officially aware, as provided by law, of the
existence of the financial crisis, assigns the main credit release authority to draw
up a financial recovery plan, and analyzes proposals to include in the financial
recovery plan to be presented by the main credit release authority of the
administrative-territorial unit. Although the law does not provide anything in this
respect, it goes without saying that this procedural approach of the deliberative
authority represents an administrative act of authority.
Moreover, the main credit release authority has the obligation to draw up a
financial recovery plan in partnership with the General Directorate of Public
finance and the committee for financial crisis situations8), within 30 days from the
date the deliberative authority declares financial crisis situation.
This financial recovery plan shall comprise economic-financial and budget
planning over the period of financial recovery procedure, and shall include the
following:
1. a presentation of the economic and financial situation of the
administrative-territorial unit;
2. measures that insure performance of essential public services by local public
administration authorities during the enforcement of the financial recovery plan;
3. measures to improve financial management and control mechanisms,
which are necessary for efficient performance of essential public services;
4. measure to increase the collection of revenues, and to generate
supplementary revenues;
5. measures to reduce expenditure;
6. economic, financial and budget planning for the financial recovery
procedure, which shall comprise:
7) We indicate that the obligation of the credit accountant to apprise the General Directorate of
Public finance was distinctly introduced by the deliberative authority by means of Government
Emergency ordinance no 46/2013.
8) The committee for financial crisis situations vas introduced by means of Government
Emergency Ordinance no. 46/2013; it should be noted that through the ordinance, this committee
gained important responsibilities in controlling the execution and performance of measures
provided in the financial recovery plan, as the ordinance modified provisions of art. 74 paragraph 8
of Law no. 273/2006.
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a) analysis of all budget revenues and expenditures, recommendations made to
increase revenues and decrease expenditures, drafting rectifications of the local budget;
b) protection of revenues and expenditure for the current year and for the
following two years;
c) reorganization of the executive, of the organization and management of the
Mayor’s and County Council specialized staff, of public services and institutions
of local or county interest;
7. setting up tasks for the performance of provisions in the financial recovery
plan, that are based on objectives, responsibilities and deadlines.
Moreover, the changes and additions to Law no. 273/2006 incurred by the
Government Emergency Ordinance no. 63/2010 approved by Law no. 3/2011,
introduced important facilities for administrative-territorial units that are in
financial crisis or insolvency proceedings and seeking loans or guarantees for
local debt refinancing, under the financial or insolvency recovery plan.
Specifically, we refer to the provisions introduced by paragraphs 41, 42 of art. 63
of Ordinance no. 63/2010, as follows: “(41) Administrative-territorial
units/subdivisions that have been overdue payments at 31 December of the
previous year, were not paid until the request opinion of local Commission of
approval the local loans, or have been operating deficit at the end of the section
prior to the application, not entitled to the contracting or guaranteeing of loans.
(42) Are exempt from the provisions of paragraph (41) territorial-administrative
units/subdivisions that are in financial crisis or insolvency proceedings and
seeking loans or guarantees for local debt refinancing, under the financial or
insolvency recovery plan.”
The financial recovery plan is filed for approval by the deliberative authority
within 3 working days from its drawing up, and it has to be adopted within 5
working days from its filing; if the financial recovery plan is not adopted, the
deliberative authority assembles to reanalyze it within 3 working days from the
previous debate session.; if the financial recovery plan is not adopted, than it is
considered endorsed in the form proposed by the initiator.
According to art. 74, paragraph 12 of Law no. 273/2006, modified by
Government Emergency Ordinance no. 46/2013, upon the request of the main
credit release authority and with the consultative approval of the committee for
financial crisis situations, the deliberative authority can declare termination of
financial crisis by enactment of a resolution, in the following situations:
a) criteria that imply the existence of financial crises have not been evident
for over 180 calendar days;
b) criteria for declaring insolvency are fulfilled, thus the administrative-
territorial unit undergoes the insolvency procedure, as provided by law.
The financial crisis situation, and its termination, respectively needs to be
registered within 5 days from declaring the financial crisis situation, by the main
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credit release authority, from approval of termination of the financial crisis
situation, respectively, in the local registry of financial crisis situations of
administrative-territorial units, which is managed by the County Public Finance
Directorate or the Bucharest Public Finance Directorate. These shall report
monthly the situations of entrance into or termination of financial crises registered
with the Ministry of Public Finance, for them to be included in the national
registry of financial crisis situations of administrative-territorial units.
Insolvency represents the situation where the administrative-territorial unit
patrimony encounters financial difficulties, characterized by acute lack of
liquidity, which leads to the inability to pay debts as they fall due for a certain
period of time.
Presumption of insolvency exists in the following cases:
a) failure to fulfill legally enforceable payment obligations, past due 120 days,
which represent over 50% of the general budget of the respective territorial-
administrative unit, with the exception of debts that are subject to commercial
litigation;
b) failure to pay salary rights under employment relations and provided in the
income and expenditure budget, for over 120 days past due date;
It becomes easily noticeable, that Government Emergency Ordinance no.
46/2013 brings about important modifications to legal provisions of Law
no.273/2006, which regulates situations of insolvency presumption. As an example,
we mention that if prior to the coming into force of the ordinance, insolvency
presumption existed when failing to pay any salary rights, the ordinance confines
this situation to cases where there is ”failure to pay salary rights under employment
relations”. From our point of view this wording implies that there is no insolvency
presumption in the case of failure to pay salary rights under labour relations specific
to the civil servant position. However, we point out that the condition for unpaid
salary rights to be provided in the income and expenditure budget for over 120 days
past due date is still in force and provided in the ordinance.
The opening of insolvency procedure of an administrative-territorial unit can
be filed at the court that has jurisdiction over the respective administrative-
territorial unit, by:
a) any creditor or group of creditors that on the following legal conditions:
– has to recover one or more outstanding debts from an administrative-
territorial unit,
– debts have a total value that represents over 50% of its budget for a period
of 120 consecutive days.
Within 30 days of the request of any interested person, the main credit release
authority of the administrative-territorial unit has the obligation to provide the
economic-financial situation and the conclusion whether by law the
administrative-territorial unit is in a state of insolvency.
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b) the main credit release authority administrative-territorial unit, which has
the obligation:
– to demand opening of insolvency procedure of an administrative-territorial
unit, within 15 days from the establishment of the state of insolvency by filing an
application at the court that has jurisdiction over the respective administrative-
territorial unit;
– to notify creditors or any other interested persons of the opening of
insolvency proceedings.
Premature, bad-faith introduction of the opening claim of insolvency
procedure by the main credit release authority makes it legally liable for any
prejudice caused to another party interested in this procedure.
By means of the opening of the insolvency procedure decision the syndic-
judge shall appoint an administrator.
The administrator has the following obligation:
1. The obligation to draw up a recovery plan for the administrative-territorial
unit, within 30 days of its appointment, with the assistance of the main credit
release authority, the approval of the General Directorate of Public Finance and of
the Territorial Chamber of Accounts. We point out that this obligation is explicitly
mentioned in provisions of art. 75 paragraph 7 of Law no. 273/2006, and is worded
according to the modifications made by Government Emergency Ordinance
no.46/2013, which extends the role of the General Directorate of Public Finance in
the administrative-territorial units insolvency procedure, to the approval of the
insolvency recovery plan; we also emphasize a positive aspect in the fact that the
Territorial Chamber of Accounts has a role in approving the insolvency recovery
plan, as provided by Law no. 273/2006. By law, this institution possesses the legal
obligation to exercise control in the execution and performance of measures
included in the financial recovery plan, but according to the ordinance this no
longer its obligation. We believe that this legislative modification is not welcome, if
we take into account the legal powers of the Court of Accounts9).
9) The Court of Accounts is organized and functions based on provisions of art. 140 of the
republished Romanian Constitution and Law no. 94/1992 on the organization and functioning of
the court of Accounts, republished and added upon; the court of Accounts exercises control over
the formation, administration and employment of financial resources of the state and of the public
sector, providing Parliament, respectively public deliberative authorities of the administrative-
territorial units, with reports on their use and administration, in accordance with the principles of
legality, regularity, economy, efficiency and effectiveness – see Regulations on the organization
and carrying out of specific activities of the court of Accounts, and the capitalization of the results
of these activities (approved by the Decision of the Court of Accounts no. 130/2010, according to
provisions of art. 11 paragraph 2 of Law no. 94/1992, republished), published in the “Official
Gazette of Romania”, Part I, no. 832 of 13 December 2010; in terms of the control review by the
Court of Auditors as a form of external administrative control, see I. Lazr, JurisdicYii
administrative în materie financiar, Universul Juridic Publishing House, Bucharest, 2011, p. 41.
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2. The obligation to monitor the compliance with the insolvency recovery
plan; if the pan is not followed the administrator shall recommend that the syndic-
judge suspend the attributions of the main credit release authority of the
administrative-territorial unit, and issue a decision for the administrator to take
over the attributions of the main credit release authority.
3. The obligation to insure that over the period the insolvency procedure is
carried out, essential public services are efficiently and effectively provided.
4. The obligation to recommend the syndic-judge to issue a termination of
insolvency procedure sentence when termination of the insolvency situation of the
administrative-territorial unit occurs.
5. The obligation to notify the main credit release authority, the creditors, and any
other interested persons about the termination of insolvency procedure sentence.
The insolvency recovery plan shall include:
a) measures to re-establish financial viability of the administrative-territorial unit;
b) measures to preserve the essential services of the administrative-territorial
unit during the insolvency period;
c) the debt settlement plan.
The insolvency recovery plan shall be endorsed by the local council, within
10 days from its drawing up, and it becomes binding for both the deliberative
authority and the main credit release authority of the administrative-territorial
unit. If the local or county council decision is not endorsed within this period, the
administrator shall recommend the syndic-judge to issue a decision for the
administrator to take over the attributions of the main credit release authority
If termination of the state of insolvency is established, at the administrator’s
recommendation the syndic-judge shall decide on the termination of the
insolvency procedure of the administrative-territorial unit.
Termination of the insolvency procedure results in a series of consequences,
such as:
the administrator is discharged of any duties or responsibilities towards the
main credit release authority, the patrimony of the administrative-territorial unit,
or towards creditors, with regard to the application of the procedure;
the administrative-territorial unit returns to the status of financial crisis;
the main credit release authority and the local council resume their
attributions and shall carry on in accordance with the financial crisis procedures,
in strictly implementing the financial recovery plan in order to remove the
administrative-territorial unit from financial crisis.
The expenses generated by payment of the administrator’s financial rights and
carrying out of the insolvency recovery procedure are expenses of the
administrative-territorial unit and are consequently paid from its budget.
The opening and termination of the insolvency procedure shall be registered
within 5 days from the declaration of insolvency situation, respectively, from the
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notification of the legal decision of termination of the procedure by the main
credit release authority, in the local registry of insolvency situations of
administrative-territorial units, which is managed by the County Public Finance
General Directorates or the Bucharest Public Finance General Directorate. These
shall report monthly on the insolvency opening and termination procedures
registered with the Ministry of Public Finance, to be included in the n national
registry of insolvency situations of administrative-territorial units.
However, we notice that according to art. 85 corroborated with art. 86
paragraph 1 letter b, of Law no. 273/2006, the Ministry of Administration and
Interior and the Ministry of Public Finance had the obligation to issue within 6
months from the coming into force of Law no. 273/2006 the special bill on the
application procedure of provisions of art. 74 and 75 on the financial crisis and
insolvency of administrative-territorial units, art. 74 and 75, which is to come into
force only when this special law shall come into force.
Although all circumstances instituted by Law no. 273/2006 promised an
imminent enactment of the law regarding financial crisis and insolvency of
territorial-administrative units, we notice that it was only in 2013 that a legislative
solution which we consider to be a legal compromise with regard to the enactment
of Government Emergency Ordinance concerning financial crisis and insolvency
of administrative-territorial units, was found.
3. Some constitutional controversies concerning Government Emergency
Ordinance no. 46/2013
The preamble of the ordinance invokes provisions of art. 85 of Law.
No.273/2006, according to which, within 6 months of its coming into force, the
Ministry of Administration and Interior, and the Ministry of Public Finance had
the obligation to draft the special law bill regarding financial crisis and insolvency
of territorial-administrative units; moreover, other aspects are invoked in order to
justify the issuing of other emergency ordinances related to this field, such as: the
over-load of arrears to be paid by administrative-territorial units/subdivisions to
goods, services and works suppliers; the necessity to resuscitate the activity of
suppliers of goods, services, and works who need to recover debts from local
public administration authorities in the form of arrears; provisions of the Stand-by
Agreement between Romanian and the International Monetary Fund, concerning
the reduction of arrears to be paid by administrative-territorial units/subdivisions;
the necessity to regulate the procedure on financial crisis and insolvency of
territorial-administrative units/subdivisions; the involvement of authorized
institutions in the economic financial recovery of territorial-administrative
units/subdivisions that deal with financial crisis and insolvency situations; right
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and obligations of territorial-administrative units/subdivisions creditors, as well as
the rights and obligations of local public administration authorities10).
As shown in the preamble, all these represent aspects that are o public interest
and represent emergency, out-of-the-ordinary situations whose regulations cannot
be delayed. On the other hand, failure to enact the emergency ordinance will lead
to failure to perform the arrangements made with international financial bodies,
which in turn, will trigger negative consequences.
Although arguments invoked in the preamble of the emergency ordinance are
pertinent, in our point of view, complete enforcement of provisions of Law no.
273/2006 is only possible by enacting a special law in the field due to at least two
aspects.
First of all, art. 85 corroborated with art. 86, paragraph 1, letter b of Law no.
273/2006 specifically mention a “special law regarding the enforcement
procedure of provisions of art. 74 and 75 concerning financial crisis and
insolvency of territorial-administrative units”, not the regulating of this issues by
emergency ordinance.
Secondly, the discussion revolves around the constitutionality of regulating
situations of financial crisis and insolvency of territorial-administrative units by
emergency ordinance, in relation to provisions of art. 72, paragraph 3, letter o of
the Constitution of Romania, which provides that “organization of local public
administration, of territory, as well as the general rule regarding local autonomy”
is regulated by organic law. Thus, according to some points of view “emergency
ordinances must not intervene in the field of organic laws, since this is an
essential condition of their constitutionality11). Furthermore, the Government’s
exercise of legislative authority by means of emergency ordinances, grounded in
art. 115 paragraph 4 of the Constitution, is limited by the cases mentioned in
paragraph 6, as emergency ordinances cannot be adopted in the field of
constitutional laws; cannot affect the general rule of fundamental institutions of
the state, rights, liberties and duties provided by the Constitution, election rights;
cannot include measures that are aimed at forced conveyance of goods into public
property. However, doctrine states that the jurisprudence of the Constitutional
Court in the field of limitations in the exercise of legislative authority by
emergency ordinances has proven to be peculiar, in the sense that the
10) For a minute analysis of the necessity to motivate regulatory administrative acts, mainly
from the perspective of Law no. 24/2000 regarding legislative technical norms for issuing
regulatory documents, as well as community documents belonging to this field (art. 296 of the
consolidated Treaty on the Functioning of the European Union, art. 41 of the Charter of
Fundamental Rights of the European Union, respectively), of jurisprudence of the Court of Justice
of the European Union, respectively- see C.R. Vlaicu, Birocraie şi procedur în administraia
public, Universul Juridic Publishing House, Bucharest, 2012, pp. 167-173.
11) For details, see A. Varga, Ordonanele guvernamentale, in “Revista Transilvan de Ştiine
Administrative”, no. 2 (11)/2004, pp. 157-164.
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Constitutional Court attempted a grammatical interpretation of the terms used by
the law-maker, which is problematical and unclear12).
Irrespective of debates on the constitutionality of issuing Government
Emergency Ordinance no. 46/2013, we observe the positive aspects of its
enactment, since regulation of financial and insolvency recovery procedures for
administrative-territorial units, represents in our view support in surviving the
current severe economic crisis which deeply affects local budgets.
Therefore, besides the modifications and completions brought to Law no.
273/2006, which have already been mentioned, the ordinance comprises a series
of other regulations that have positive effects upon local budgets; they provide
protection measures for territorial-administrative units in the insolvency of
administrative-territorial units procedure. Thus ”On the initiation of the procedure
all legal or extra-legal actions for recovery of debts from administrative-territorial
units are suspended.” (art. 66) respectively “No interest, increase, penalty or
expenses of any type can be added to the previously created debts or consequent
to the initiation of the procedure, that are not guaranteed with mortgage, deposit
or other real movable guarantee or right of lien of any type, or to unguaranteed
parties from debts guaranteed with such warrantees, from the date the procedure is
initiated”(art. 68).
One the other hand, what should be noted is the public document characteristic
of the local Registry of insolvency situations of administrative-territorial units,
which inventories all insolvent administrative-territorial units, and is managed by
the General Directorates of County Public Finance. In our opinion, the public
document characteristic proves the application of the unanimously acknowledged
principle of transparency and free access to public interest information in the fields
regulated by Government Emergency Ordinance no. 46/2013. Furthermore,
according to the last part of art. 52 paragraph 1 of the ordinance, this Registry is
permanently updated on the web page of the Ministry of Public Finance13).
12) D.C. Dnişor, Intelegerea trunchiat a competentei exclusive a Curtii Constitutionale in
domeniul contenciosului constitutional--(II). Partajul competentelor de justitie constitutionala in
raport cu distingerea validitatii de conformitate, în “Pandectele Române” no. 3/2011, pp. 31-32.
13) Which in our opinion, represents a form of materialization of public administration
transparency, as well as that of the innovative concepts of e-administration and e-government,
established in European Union Law, and which can be directly and immediately implemented in our
domestic law; for doctrinarian establishment see E.L. Ctan, Principiile bunei guvernri. Evoluii
europene şi studii comparative, Universul Juridic Publishing House, Bucharest, 2009, pp. 86-94; D.
Sabu, E-government – A theoretical Framework, in Dragoş, Neamu&Hamlin (eds.), “Law in Action:
Case Studies in Good Governance”, Institute for Public Policies and Social Research, Michig an State
University, East Lansing, Michigan, 2011, pp. 189-190; A.-C. Baciu, A.-M. Codreanu, Perspectives on
Transparency and E-Government in Selected Local Administrations, in Dragoş, Neamu&Hamlin
(eds.), ”Law in Action: Case Studies in Good Governance”, Institute for Public Policies and Social
Research, Michigan State University, East Lansing, Michigan, 2011, pp. 225-254.
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4. Conclusions
Although the Law no. 273/2006 on local public finance, with recent changes
and additions have occurred through the Government Emergency Ordinance no.
63/2010 approved by Law no. 3/2011, includes provisions related to financial
crisis and insolvency of administrative-territorial units, these prove to be
inapplicable if their coming into force is conditioned by the coming into force of a
special law on financial crisis and insolvency of administrative-territorial units.
Even though all circumstances instituted by Law no. 273/2006 promised an
imminent enactment of the law regarding financial crisis and insolvency of
territorial-administrative units, we notice that it was only in 2013 that a legislative
solution related to the enactment of Government Emergency Ordinance concerning
financial crisis and insolvency of administrative-territorial units, was found.
Despite the fact that it does not represent the optimal legislative solution in the
current constitutional context, the enactment of Government Emergency Ordinance
no. 46/2013 is to be valued, first of all because of the preventive role of the regulatory
procedure to be applied in financial crisis situations, an secondly because its
application could prevent administrative-territorial units from going into insolvency.
Since the administrative-territorial unit represents the local collectivity, and the
patrimony of the administrative-territorial unit does not belong to elected local public
authorities but to the collectivity itself, and there is a feeling of collective “shame”
generated by such a situation, we are of the opinion that the negative social impact of
an administrative-territorial unit in financial crisis or insolvency is certain.
There is also another great certainty: there is the need for a regulatory
framework that regulates financial crisis and the possibility for administrative-
territorial units to become insolvent, for the regulation of financial and insolvency
recovery procedures that would protect administrative-territorial units which have
to undergo the current economic crisis, and whose effects directly affect local
budgets.
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