August 03 2010
Debate has been ongoing regarding the intent of Brazilian states and municipalities to charge fees for the use of 'eminent domain strips' (the spaces extending over and along public highways) by public federal service companies which have been granted concessions to carry electricity over and along such highways.
Based on Article 21, Item XII, Sub-item B of the Federal Constitution,(1) some argue that states and municipalities are entitled to charge for the use of their assets, such as the public municipal, state or federal highways, whose management has been delegated to the state administration. Advocates for such charges also assume that the fees would represent charges by the public authorities for police services.
However, this type of government fee not only violates the Federal Constitution, but also makes a mockery of Article 151 of the Waters Act (Decree 24.634/1934), as well as Decrees 84.398 and 86.859, since the levy of such charges would be both unconstitutional and illegal.
In its consideration of the issue, the Superior Court of Justice reaffirmed the understanding that charging fees for use of the eminent domain strip and the space extending over and along public highways is unacceptable. It has issued several decisions on the matter, including:
Three constitutional claims(2) relating to this issue are being reviewed by the Supreme Federal Court, and the Attorney General's Office has already issued its opinion on each claim regarding the unconstitutionality of the charges. Moreover, in a recent judgment,(3) the Supreme Court declared the fees to be unconstitutional in a unanimous decision.(4)
Thus, the Supreme Court has put an end to 10 years of discussions and lawsuits by taking a stand against the levying of fees on electricity distribution concessionaires for their use of eminent domain spaces or spaces over highways.
For further information on this topic please contact Eduardo Maffia Queiroz Nobre or Silvio de Souza Garrido Junior at Leite Tosto E Barros Advogados by telephone (+55 11 3847 3939), fax (+55 11 3847 3800) or email (firstname.lastname@example.org or email@example.com.)
"It is the Federal Union responsibility:
XII - to exploit (either directly or by way of a concession or permission):
b) the services pertaining to and the electric power installations, as well as the exploitation of water courses to harness energy, in conjunction with the States where said hydro-energetic sources are located."
(2) ADIN 3.763-3 (Reporting Justice Joaquim Barbosa) filed against the law which enacted the imposition of said fees within the state of Rio Grande do Sul. ADIN 3.798-6 (Reporting Justice Ellen Gracie), filed against the law that enacted such imposition within the state of Santa Catarina. ADIN 3.703-0 (Reporting Justice Joaquim Barbosa), filed against the law that enacted such imposition within the state of Rio de Janeiro.
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Silvio de Souza Garrido Jr