Would Connecticut’s 1993 municipal bond assistance bill violate local home rule?

Plain-English summary

In June 1993, Connecticut’s AG concluded that proposed House Bill 7114, a municipal bond-assistance measure, did not violate the state constitution’s home-rule provision. The proposal offered state credit enhancement to municipalities unable to get reasonable bond insurance or access bond markets. Municipalities seeking the program would apply for certification and meet conditions for issuing deficit obligations. The AG described the bill as general legislation responding to a statewide problem, rather than a special law directed at a particular municipality.

The bill also restricted municipal Chapter 9 bankruptcy filings, including a requirement for the governor’s prior written consent. The AG said federal bankruptcy law left states to decide whether their municipalities could file and preserved state control over municipal powers. On that reading, the proposed restrictions did not conflict with home rule. This was an opinion about a bill as proposed in 1993, not an account of any law ultimately enacted.

Legislators and state finance officials at the time

The opinion treated the bill’s generally available bond assistance and proposed bankruptcy limits as within the state’s lawmaking authority.

Municipal officials at the time

The AG said participation depended on applying for certification. He did not treat home rule as giving a municipality an independent right to Chapter 9 relief contrary to state authorization.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Was the proposed bond-assistance bill an unconstitutional special law for one city?
A: The AG said no. It was framed for any Connecticut municipality meeting its financial-access conditions.

Q: Could Connecticut require a governor’s consent before a municipality filed Chapter 9 bankruptcy?
A: The AG said the proposed restriction was compatible with home rule because state law determines whether a municipality may be a Chapter 9 debtor.

Q: Did every municipality have to join the assistance program?
A: No. The opinion described certification and program requirements for municipalities that applied for the proposed assistance.

Background and statutory framework

The AG read Conn. Const. art. X, § 1 and Conn. Gen. Stat. § 2-14 as limiting special municipal legislation while leaving room for general laws on statewide concerns. He also discussed the federal requirement for state authorization of municipal Chapter 9 filings under 11 U.S.C. § 109(c), along with the state-control provision in Chapter 9.

Citations and references

Authorities: Conn. Const. art. X, § 1; Conn. Gen. Stat. § 2-14; 11 U.S.C. § 109(c).

Cases: Shelton v. Commissioner, 193 Conn. 506, 521, 479 A.2d 208, 216 (l984); In re City of Bridgeport, Debtor, 128 B.R. 688, 692 (D. Conn. l991).

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1993-formal-opinions/hon-joseph-m-suggs-jr--state-treasurer--1993012-formal-opinion-attorney-general-of-connecticut

Original opinion text

Hon. Joseph M. Suggs, Jr. , State Treasurer , 1993-012 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

June 14, 1993

Hon. Joseph M. Suggs, Jr.

State Treasurer

55 Elm Street

Hartford, CT 06106-1773

Dear Mr. Suggs:

In your letter of March 26, l993, you requested our opinion concerning perceived conflicts between the requirements of proposed House Bill 7114, "An Act to Assist Connecticut Communities Seeking Economic Stability" (the "Act"), and Article Tenth, Section 1 of the Connecticut Constitution which preserves home rule for Connecticut municipalities.

It is our opinion that the provisions of the proposed legislation do not conflict with or contravene home rule.

In Connecticut "the powers of a municipal corporation are wholly statutory." Sheehan v. Altschuler, 148 Conn. 517, 526, 172 A.2d 897, 901 (l961). The legislature's authority to pass statutes concerning municipal power is limited by Article Tenth, Section 1 of the Connecticut Constitution, which generally prohibits the enactment of special, and not general, legislation concerning municipalities. Conn. Const. art. X, § 1. Special legislation, generally, is legislation that is "made for individual cases or for particular places or districts...." Black's Law Dictionary 1253 (5th ed. 1979).

Connecticut statutes, too, prohibit "special legislation relative to the powers, organization and form of any town, city, borough or other unit of local government unless requested by a town, city, borough or other unit of local government...." Conn. Gen. Stat. § 2-14. Special legislation is still permitted as to borrowing power, validating acts, and formation, consolidation, and dissolution of any town, city or borough where in the delegation of legislative authority by general law, the General Assembly failed to prescribe the powers necessary to effect the purpose of such special legislation. Conn. Const. art. X, § 1.

The home rule provisions of Article Tenth, Section 1 prohibit the state legislature only from regulating matters of purely local concern. Caufield v. Noble, 178 Conn. 81, 90-91, 420 A.2d 1160 (l979). "It does not follow from our constitutional commitment to home rule that the state legislature is thereby precluded from addressing problems of statewide concern...." Shelton v. Commissioner, 193 Conn. 506, 521, 479 A.2d 208, 216 (l984).

House Bill No. 7114 proposes to establish a program called ACCSES (Assisting Connecticut Communities Seeking Economic Stability) which will provide state credit enhancement to municipal bond issuers who are either unable to secure municipal bond insurance from any bond insurance company on reasonable terms and conditions or unable to access bond markets. Section 1(8) of the Act specifically excludes from its terms any municipal bonds authorized to be issued under Chapter 110 of the Connecticut General Statutes. House Bill 7114 authorizes municipalities to issue deficit obligations to fund a deficit, Section 9(a) and (b), provided that such municipality does so in the manner prescribed by regulations adopted under the Act.

Only municipalities that apply to the Secretary of the Office of Policy and Management for certification under the Act are subject to the terms of the Act. H.B. 7114, §§ 14, 16, 19. Section 3 of the Act requires any municipality seeking assistance under the ACCSES bill to document that it has authorized the issuance of general obligations and established a property tax intercept procedure and a debt service payment fund under the Act in accordance with either its charter, a special act or home rule ordinance.

Since House Bill 7114 applies to any municipality in the state that needs assistance in issuing bonds, House Bill 7114 is general legislation which addresses "problems of statewide concern...." Shelton v. Commissioner, 193 Conn. at 521. Thus, the Act neither conflicts with nor infringes upon the statutory powers reserved to municipalities under Section 7-148 of the Connecticut General Statutes or with the home rule principles of Article Tenth, Section 1.

Section 7-148(c)(2)(I) empowers municipalities to "regulate the method of borrowing money for any purpose for which taxes may be levied and borrow on the faith and credit of the municipality for such general or special purposes and to such extent as is authorized by general statute." The provisions of House Bill 7114 provide just such general statutory authority by which municipalities may borrow by issuing deficit obligations.

Section 7 of the Act, which prohibits municipalities from filing "a petition to become a debtor under Chapter 9 of title 11 of the United States Code without the express prior written consent of the governor" and Section 13 of the Act, which bars any "certified municipality" from filing a debtor's petition under chapter 9, do not conflict with or contravene Connecticut's constitutional commitment to home rule. Although Section 109(c) of Chapter 9 of the Bankruptcy Code, 11 U.S.C. § 109(c), provides that an entity may be a debtor under Chapter 9 if it is a municipality and if it is "generally authorized to be a debtor under such chapter by State law," Chapter 9 "does not give a city rights and powers independent of the State." In re City of Bridgeport, Debtor, 128 B.R. 688, 692 (D. Conn. l991). "It is the state which must decide whether to empower its cities to file." Id.

House Bill 7114 makes it clear that Connecticut municipalities have no right to become debtors under Chapter 9. But because Section 903 of Chapter 9 expressly provides that it "does not limit or impair the power of a State to control, by legislation or otherwise, a municipality of or in such State in the exercise of the political or governmental powers of such municipality," the restriction of this municipal authority is the State's prerogative. Thus, general legislation may expressly deny municipalities the right to become debtors under Chapter 9 without clashing with home rule principles.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Anne O'Leary

Assistant Attorney General

RB/AO/bjg