Royal Decree-Law 39/2020, of December 29, on financial measures for social and economic support and for compliance with the execution of court rulings

OFFICIAL GAZETTE OF THE STATE No. 340 Wednesday, December 30, 2020 Sec. I. Page 122986 I. GENERAL PROVISIONS HEAD OF STATE 17267 Royal Decree-Law 39/2020, of December 29, on financial measures for social and economic support and for compliance with the execution of court rulings. I The state of economic and social emergency caused by the pandemic continues to require the adoption of social and economic support measures, which add to the emergency situations arising from unforeseen legal circumstances, such as the proper compliance with court rulings that may have economic repercussions leading to urgent legislative changes. With the aim of addressing these described circumstances, a set of social and economic measures is adopted, detailed below. With the aim of reducing the tax burden on beneficiaries of the minimum vital income, their exemption from the Personal Income Tax is declared under the same terms as the economic benefits established by the autonomous communities under the concept of minimum insertion income to guarantee subsistence economic resources to persons lacking them, as well as other aid established by them or by local entities to attend, in accordance with their regulations, to groups at risk of social exclusion, social emergency situations, housing needs of persons without resources, or needs for food, schooling, and other basic needs of minors or persons with disabilities when they and their dependents lack sufficient economic means, so that the minimum vital income together with said benefits and aid shall be considered exempt up to a maximum combined annual amount of 1.5 times the public indicator of multiple-effect incomes. Furthermore, pursuant to Royal Decree 855/2008 of May 16, the concession for underground natural gas storage known as "Castor" was granted to "ESCAL UGS, S.L.". Article 14 of the aforementioned Royal Decree 855/2008 of May 16 provided for compensation to the concessionaire company for the net book value of the facilities affected by the underground storage, provided they remained operational. Royal Decree-Law 13/2014, of October 3, on urgent measures regarding the gas system and the ownership of nuclear power plants, determined the extinction of the "Castor" storage concession and assigned its administration to ENAGAS. The investments made by ESCAL in the storage were valued at 1,350,729 thousand euros, which were paid by ENAGAS to ESCAL. The royal decree-law recognized ENAGAS's right to collect said amounts over 30 years, authorizing their assignment to third parties, in which case they would become subjects of the gas system's settlement system, with priority over the rest of the system's payments. The Constitutional Court Ruling 152/2017, of December 21, declared unconstitutional and null articles 4 to 6, article 2.2, the first additional provision, and the first transitional provision of the aforementioned Royal Decree-Law 13/2014, of October 3, which, among other aspects, included ENAGAS's collection rights. The Supreme Court, in Ruling 1404/2020 of the Administrative Litigation Chamber, recognized the right of Banco Santander, S.A., CaixaBank, S.A., and Bankia, S.A. to be indemnified by the State with 1,350.729 million euros, an amount that the three entities advanced to ENAGAS to facilitate the closure of the Castor underwater gas storage. To this amount must be added compensatory interest from the date of filing the claim until the date of notification of the ruling, without prejudice to the legal interest that may correspond from said notification in accordance with current regulations. cve: BOE-A-2020-17267 Verifiable at https://www.boe.es

OFFICIAL GAZETTE OF THE STATE No. 340 Wednesday, December 30, 2020 Sec. I. Page 122987 In its ruling, the High Court partially upholds the appeal of the three entities, which in April 2018 filed before the Executive a "claim for the legislative state's liability" in which they urged the return of the money contributed to indemnify the former Castor concessionaire for the gas storage shutdown. The execution of the aforementioned ruling will be carried out by the Ministry of Finance, to which an expansion of the credit allocated for the payment of rulings on the legislative state's patrimonial liability is granted in order to proceed with the payment. To obtain the necessary financing to cover its payment, given the high amount fixed in the ruling and the needs the State has had to face to mitigate the economic, social, and health effects caused by COVID-19, it is necessary to resort in part to borrowing, as the Contingency Fund lacks sufficient resources to finance it. The final provisions amend Law 14/2000, of December 29, on Fiscal, Administrative, and Social Order Measures, since, in the current context, where the COVID-19 pandemic has generated an unprecedented global crisis, Spain's contributions to multilateral financial institutions take on special importance. It is common in these institutions that both in the subscription of shares and in the replenishment of funds, the deadline to formalize the legal instrument by which the final commitment is acquired ends in the last month of the calendar year, and the deadline to make the first disbursement begins in the following year. The objective is to urgently enable the mechanism to adapt the processing of expenditure files for those contributions where internationally established calendars determine that the first disbursement of a contribution is made in a different calendar year (usually the following) from that in which the commitment was acquired, in accordance with article 47.6 of Law 47/2003, of November 26, General Budgetary Law. It is considered that enabling this mechanism is a measure of extraordinary and urgent necessity so that Spain can integrate in a timely and proper manner into the instruments that multilateral financial institutions put in place to provide a global response to the COVID-19 crisis. The pandemic represents a global crisis, in which a country-by-country approach is inefficient and in which multilateral instruments are the main tool to channel financing to the weakest economies affected by the virus and to ensure both the strengthening of health systems and the equitable purchase of vaccines in the poorest countries. Spain must be in a position to commit resources within the internationally established deadlines, and with this proposal, the necessary mechanism for this is ensured. Likewise, Law 19/1994, of July 6, on the modification of the Economic and Fiscal Regime of the Canary Islands, is amended to extend by one year the deadlines to effect the materialization of the reserve for investments in the Canary Islands funded with profits obtained in tax periods starting in 2016 and the funding of said reserve relative to the advance investments made in 2017 and considered as its materialization, due to the serious effects that the pandemic has produced on the execution of investments and economic results in 2020. II This royal decree-law consists of an explanatory statement and an operative part integrated by two articles, divided into two chapters, a single repealing provision, and five final provisions. Article 1 aims to declare the minimum vital income exempt under the same conditions as the rest of public monetary social benefits, without prejudice to the obligation to declare the tax that falls on its recipients. This measure must be adopted on an urgent basis so that these groups can benefit as soon as possible from its social and economic effects. cve: BOE-A-2020-17267 Verifiable at https://www.boe.es

OFFICIAL GAZETTE OF THE STATE No. 340 Wednesday, December 30, 2020 Sec. I. Page 122988 Article 2 aims to provide adequate and urgent compliance with ruling 1404/2020 of the Supreme Court, which is subject to mandatory execution within a deadline. The single repealing provision incorporates a general clause repealing any provisions of equal or lower rank that oppose or contradict what is stipulated in the projected royal decree-law. The first final provision collects the modification of Law 14/2000, of December 29, on Fiscal, Administrative, and Social Order Measures, whose modification is urgent given the situation caused by the COVID-19 pandemic that has generated an unprecedented global crisis, and Spain's contributions to multilateral financial institutions take on special importance to mitigate its consequences. The second final provision amends Law 19/1994, of July 6, on the modification of the Economic and Fiscal Regime of the Canary Islands, to extend by one year the deadlines to effect the materialization of the reserve for investments in the Canary Islands funded with profits obtained in tax periods starting in 2016 and the funding of said reserve relative to the advance investments made in 2017 and considered as its materialization, due to the serious effects that the pandemic has produced on the execution of investments and economic results in 2020, which requires an immediate and urgent response. The last three final provisions refer to the competence title, the normative authorization, and the entry into force, respectively. III In the entirety and in each of the measures adopted, the circumstances of extraordinary and urgent necessity required by article 86 of the Spanish Constitution as enabling prerequisites for the approval of a royal decree-law concur, by their nature and purpose. Article 86 of the Spanish Constitution allows the Government to issue royal decree-laws "in case of urgent and extraordinary necessity", provided they do not affect the ordering of the State's basic institutions, the rights, duties, and freedoms of citizens regulated in Title I of the Constitution, the regime of the autonomous communities, nor general electoral law. Regarding the first aspect, the use of this normative instrument with the rank of law is conditioned on the existence of specific circumstances that "for reasons difficult to foresee, [require] immediate normative action within a shorter timeframe than that required by the normal route or by the urgency procedure for the parliamentary processing of laws" (Constitutional Court Ruling 6/1983, of February 4). The Constitutional Court has declared that this situation of extraordinary and urgent necessity can be deduced "from a plurality of elements", among them, "those reflected in the explanatory statement of the norm" (Constitutional Court Ruling 6/1983, of February 4). On the other hand, between the situation of extraordinary and urgent necessity that enables the use of the royal decree-law and the measures contained within it, there must be a "direct or congruent relationship". Therefore, for the concurrence of the prerequisite of extraordinary and urgent necessity, Constitutional Court Ruling 61/2018, of June 7, (FJ 4), requires, on the one hand, "the explicit and reasoned presentation of the motives that the Government has taken into account for its approval", that is, what has come to be called the urgency situation; and, on the other, "the existence of a necessary connection between the defined urgency situation and the concrete measure adopted to address it". The royal decree-law constitutes a constitutionally lawful instrument, provided that the purpose justifying the urgency legislation is, as our Constitutional Court has repeatedly required (Rulings 6/1983, of February 4, F. 5; 11/2002, of January 17, F. 4, 137/2003, of July 3, F. 3 and 189/2005, of July 7, F. 3), to address a concrete situation, within governmental objectives, that for reasons difficult to foresee requires immediate normative action within a shorter timeframe than that required by the normal route or by the urgency procedure for the parliamentary processing of laws, especially since the determination of said procedure does not depend on the Government. cve: BOE-A-2020-17267 Verifiable at https://www.boe.es

OFFICIAL GAZETTE OF THE STATE No. 340 Wednesday, December 30, 2020 Sec. I. Page 122989 The extraordinary and urgent necessity to approve this royal decree-law falls within the political or opportunity judgment that corresponds to the Government (Rulings 61/2018, of June 7, FJ 4; 142/2014, of September 11, FJ 3) and this decision undoubtedly involves an ordering of political priorities of action (Constitutional Court Ruling, January 30, 2019, Unconstitutionality Appeal No. 2208-2019), focused on compliance with legal certainty and public health. The opportunity motives just exposed demonstrate that, in no case, the present royal decree-law constitutes a case of abusive or arbitrary use of this constitutional instrument (Rulings 61/2018, of June 7, FJ 4; 100/2012, of May 8, FJ 8; 237/2012, of December 13, FJ 4; 39/2013, of February 14, FJ 5). On the contrary, all the reasons stated widely and reasonably justify the adoption of the present norm (Rulings 29/1982, of May 31, FJ 3; 111/1983, of December 2, FJ 5; 182/1997, of October 20, FJ 3). It should also be noted that this royal decree-law does not affect the ordering of the State's basic institutions, the rights, duties, and freedoms of citizens regulated in Title I of the Constitution, the regime of the autonomous communities, nor general electoral law. In this sense, and in relation to the prohibition of affecting the rights, duties, and freedoms of citizens regulated in Title I of the Spanish Constitution, the consolidated constitutional doctrine, summarized in Constitutional Court Ruling 139/2016, of July 31 (FJ 6), "1.º) (…) this Tribunal has rejected an extensive interpretation of said limit that would entail the hollowing out of the decree-law figure, making it 'useless to regulate with greater or lesser incidence any aspect concerning the matters included in Title I of the Constitution'; 2.º) The restrictive clause must be understood in such a way that it does not reduce the decree-law figure to nothing, so that what is constitutionally prohibited is to regulate a general regime of these rights, duties, and freedoms or that it goes against the content or essential elements of some of such rights (Constitutional Court Ruling 111/1983, of December 2, FJ 8, confirmed by other subsequent ones); 3.º) The Tribunal should not focus solely on how the principle of legal reservation manifests in a given matter, but rather must examine whether there has been an 'affectation' by the decree-law of a right, duty, or freedom regulated in Title I CE, which will require taking into account the constitutional configuration of the right, duty, or freedom affected in each case and even its systematic location in the constitutional text and the nature and scope of the concrete regulation in question (…)». IV This royal decree-law responds to the principles of good regulation of necessity, efficacy, proportionality, legal certainty, transparency, and efficiency, in accordance with article 129 of Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations. To this end, the compliance with the principles of necessity and efficacy is demonstrated given the general interest on which the established measure is based, with the royal decree-law being the most immediate instrument to guarantee its achievement. The norm is in accordance with the principle of proportionality, as it contains the indispensable regulation for achieving the previously mentioned objectives. Likewise, it complies with the principle of legal certainty, being coherent with the rest of the legal system. Regarding the principle of transparency, the norm is exempt from the procedures of public consultation, hearing, and public information, which are not applicable to the processing and approval of royal decree-laws. Finally, regarding the principle of efficiency, in this royal decree-law, care has been taken to ensure that the norm generates the least administrative burdens for citizens. This royal decree-law is issued under the provisions of article 149.1.14th of the Spanish Constitution, which attributes exclusive competence to the State in matters of general finance. cve: BOE-A-2020-17267 Verifiable at https://www.boe.es

OFFICIAL GAZETTE OF THE STATE No. 340 Wednesday, December 30, 2020 Sec. I. Page 122990 In virtue thereof, making use of the authorization contained in article 86 of the Spanish Constitution, on the proposal of the Minister of Finance, and after deliberation of the Council of Ministers, in its meeting of December 29, 2020, I HEREBY ORDER: CHAPTER I Social Measures Article 1. Treatment in the Personal Income Tax of the minimum vital income. With effect from the entry into force of Royal Decree-Law 20/2020, of May 29, establishing the minimum vital income, letter y) of article 7 of Law 35/2006, of November 28, on the Personal Income Tax and partial modification of the laws on Corporate Tax, on Non-Resident Income Tax, and on Wealth Tax, is amended, which shall read as follows: «y) The Social Security benefit of the Minimum Vital Income, the economic benefits established by the Autonomous Communities under the concept of minimum insertion income to guarantee subsistence economic resources to persons lacking them, as well as other aid established by them or by local entities to attend, in accordance with their regulations, to groups at risk of social exclusion, social emergency situations, housing needs of persons without resources, or needs for food, schooling, and other basic needs of minors or persons with disabilities when they and their dependents lack sufficient economic means, up to a maximum combined annual amount of 1.5 times the public indicator of multiple-effect incomes. Likewise, aid granted to victims of violent crimes referred to in Law 35/1995, of December 11, on Aid and Assistance to Victims of Violent Crimes and Against Sexual Freedom, and aid provided in Organic Law 1/2004, of December 28, on Comprehensive Protection Measures against Gender Violence, and other public aid paid to victims of gender violence by such condition, shall also be exempt.» CHAPTER II Economic Measures for the Execution of Rulings Article 2. Granting of a credit expansion allocated to the Ministry of Finance.

1. The execution of Supreme Court Ruling 1404/2020, on the legislative state's patrimonial liability, shall be carried out by the Ministry of Finance, attributing the competence for its execution and the authorization for the approval of the corresponding expenditure file to the person holding the position of Undersecretary of Finance.
2. With the aim of proceeding to the payment of the execution of the aforementioned ruling, a credit expansion of 638,000,000 euros is granted in budgetary application 15.01. 923 M.471 "For payment of execution of Supreme Court Ruling of 20/11/2013 and other rulings on the legislative state's patrimonial liability", which has an expandable nature.
3. This credit expansion shall be financed from public debt, in accordance with what is stated in article 46 of Law 6/2018, of July 3, on the General State Budgets for the year 2018. cve: BOE-A-2020-17267 Verifiable at https://www.boe.es

OFFICIAL GAZETTE OF THE STATE No. 340 Wednesday, December 30, 2020 Sec. I. Page 122991 4. This credit shall be expanded up to the total amount of the ruling, financing its amount with a reduction in other credits from the State budget, with the limitations contained in paragraph 4 of article 54 of Law 47/2003, of November 26, General Budgetary Law, not being applicable. 5. The expenditure files and associated accounting documents with the execution of this credit shall be exempt from the deadlines collected in Order HAC/1074/2020, of November 16, regulating the closing operations of the 2020 fiscal year relative to the expenditure budget and non-budgetary operations. Likewise, they shall be exempt from what is stipulated in paragraphs six and seven of the Council of Ministers Agreement, of December 27, 2019, establishing the criteria for the application of the extension for 2020 of the General State Budgets valid in 2019, formalizing the distribution by sections, and approving measures to reinforce public expenditure control. Single Repealing Provision. Repeal of Norms. All provisions of equal or lower rank that oppose what is stipulated in this royal decree-law are hereby repealed. First Final Provision. Modification of Law 14/2000, of December 29, on Fiscal, Administrative, and Social Order Measures. With effect from the entry into force of this royal decree-law and indefinite validity, Law 14/2000, of December 29, on Fiscal, Administrative, and Social Order Measures, is amended as follows: One. Article 45 of Law 14/2000 is amended, which shall read as follows: «Article 45. Acts of subscription of shares and contribution of funds to international financial institutions.

1. The acts of subscription of shares or contributions of funds derived from capital increase agreements or replenishments adopted by the competent bodies of the development banks and multilateral financial institutions of which Spain is a member by right, the replenishment of funds in multilateral instruments in which Spain already participates as a donor, and the economic disbursements that must be made to comply with the obligations contracted by the Spanish State as a consequence of those acts, will only require the prior favorable agreement of the Council of Ministers, on the proposal of the person holding the position of the Minister of Economic Affairs and Digital Transformation, provided that there is adequate and sufficient credit in the General State Budgets and, if applicable, the limits provided in article 47 of Law 47/2003, of November 26, General Budgetary Law, are met, in accordance with the payment schedule provided. The agreement shall be submitted to the Council of Ministers prior to a report from the Ministry of Finance.
2. The